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Scrum in Sales

How to improve account management and sales processes


Rini van Solingen
iSense Prowareness and Delft University of Technology r.vansolingen@prowareness.nl d.m.vansolingen@tudelft.nl

Jeff Sutherland
ScrumInc Boston, USA jeff.sutherland@scruminc.com

Denny de Waard
iSense Prowareness The Netherlands d.dewaard@prowareness.nl

Abstract In the fall of 2010 the iSense sales and account management teams adopted Scrum for their sales processes. In this paper we share our experiences by presenting the processes, lessons learned and main achievements, from using Scrum in sales. The most dramatic effect of using Scrum in sales was the insight that the direct cause for closing a sales deal could be detected and controlled. Through use of Scrum, the sales teams learned that there are early indicators that directly relate to final sales results. As such, it becomes easier to predict and influence final order intake and sales numbers. When early indicators, such as: the number of visitors to events or the number of consultant vacancies, falls below the known boundaries, it is clear that sales numbers will drop several weeks/months later. Corrective action can then be taken. Before using Scrum, everyone shared a common agreement that sales is a random process which is ultimately impossible to control; after all, the customer decides to buy and not the sales managers. Currently, the sales teams have learned that they have early predictive indicators that help them to control their final outputs, and this gives them control over outcomes. Furthermore, the sales teams have their processes better under control, they improve them continuously and simply have more fun in work. Scrum in sales can lead to escalating revenue and a sustainable competitive advantage. Keywords: Scrum, Sales, Account Management, Scrum Board

Prowareness rolled out Scrum in all of its departments. It started with the software development teams, but now also includes the account and sales teams. In this paper we will share: the reasons the sales and account teams started with Scrum in the first place, the situation before adopting Scrum, the initial change made in the teams and the subsequent changes that came forward from this, the current Scrum processes in sales, lessons learned, major achievements and next steps. II. MOTIVATION TO ADOPT SCRUM

I.

INTRODUCTION

Scrum is increasingly used outside of software development. In fact, the first use of Scrum in product development that was observed and named by Takeuchi and Nonaka was primarily in manufacturing [1]. More recently, Scrum has been adopted by a venture capital group for all its investment search, support, and administrative processes in addition to multi-department use in over a dozen portfolio companies [2]. Scrum has even been adopted as a radical management strategy in some organizations, working at the level of the senior management team [3]. Early adoption of Scrum in sales and marketing has been seen in several companies in the U.S. and Europe. However, this paper provides the first documented insights into how Scrum can improve predictability in the sales process leading directly to increased revenue. As a follow-up to the Scrumification of its software development processes, iSense ICT professionals and iSense

From experience developing software for European customers, the iSense Indian software teams learned the power of short iterations, test driven development and delivering releasable product. As this was organized mainly as a risk prevention strategy in contracts with European customers, it was more or less imposed upon the teams. However, it had quite positive effects. Unfortunately, these separate techniques did not provide a clear structure for the software development process itself, nor did it provide structure on the side of the customer. Teams in India performed some research and expressed interest in Agile processes, in particular: Scrum. The iSense European office in the Netherlands was in parallel already investigating Scrum as an additional line of service: providing training and consultancy in Scrum with Dutch employees for Dutch customers, independent of the offshore services. One thing led to the other. Considering the interest on both sides, the potential benefits in software delivery and consultancy, and the vision of the iSense management that Agility is a necessary strategy to succeed, Scrum was adopted. Help was found by having some keypeople on Scrum content linked to the company to advise on successful Scrum adoption. The team that was selling the Agile services and the offshore services decided to eat their own dog food, i.e, drink their own champagne. They decided that for selling Scrum consultancy or Scrum software projects, they needed a thorough understanding and experience too. As such, they

decided to adopt Scrum for their sales processes to gain experience and improve their ability in selling it. Summarizing, the initial interest to adopt Scrum in sales came forward from an intrinsic motivation to understand Scrum. Improving anything else would have been seen as a bonus at this stage. III. SITUATION BEFORE THE DEPLOYMENT OF SCRUM Before presenting the interventions done in detail, we first give a rough sketch of how the sales team was working and how their ideas of sales processes were. A. Unclear status of individual work and progress Account managers were responsible for their own work, tasks and outcomes. There was no common understanding of the individual tasks carried out. The account teams use a CRM system in which they store every customer contact in great detail, but because accounts are related to an individual account manager, they rarely read each others reports. What remained was a black box of each individuals processes of which only the outcome would be shared: deals made and size of the deal. As such there was only one main indicator of everyones work processes and that was the amount of work sold. Every week everyone communicated their forecast of the expected sales and at the end of the week they shared the actual sales numbers. B. Unclear status of sales processes Besides the limited insight in the individual progress of tasks, there was no overall view of the exact sales process. Account managers focused on their own accounts and individual sales figures, without consideration of the overall result of the entire sales team. When first discussing the opportunity to apply Scrum for sales, most account managers were skeptical. Their overall feeling was the software development is radically different from sales processes, because there is much more unpredictability in sales. After all, it is the customer that signs the deal or not. As such, they stated, it is not possible to really predict sales, while a developer knows (according to the sales people) directly that when a certain effort is spent that they will produce a certain result. The initial focus was on the difficulties of using Scrum in sales. C. Only insight in outputs (final sales numbers) The only progress measured in the sales teams was the amount of work sold. There were no process indicators in use that were known to be directly related to the end result. There was some tracking of the number of phone calls made during a day. However, to what extent these resulted in actual sales were unknown. The management could only steer the account teams on the output indicators. The final yes or no from a client determines whether an account manager did a good job or not. This led to large fluctuations in results and the moral of the sales team. Management could only steer the team by increasing (or decreasing) sales targets. However, this works only in a very limited way; there is never a account manager that postpones a deal because the sales target was already reached. A deal is after all a deal. As a result the management had only limited control of sales process output.

D. No insight into causes and effects in the sales process Although every individual account manager was already giving the best effort, there was no clear understanding of the relation between specific tasks and final sales results. To improve sales outputs, they could only work harder. Working smarter was not a real option because the relation between causes and effects in the sales process were unknown. Except for the more calls you make, the more deals you get. Generally spoken, account managers were contacting (potential) customers, spoke with them to find out their needs and when they could provide a service for an acceptable price, they made a deal. E. No reflection on sales activities and no improvement cycle Because the sales teams were working really hard to achieve their sales targets, there was not really a frequent reflection done, nor was there an improvement cycle established. Of course, there was communication and when something worked, they all tried to benefit from it. However, there was no structured and frequent activity in which the team, as a whole, were attempting to learn and work smarter. IV. INTERVENTION

A. Do Scrum ourselves The first Scrum team (the team that was selling Scrum consultancy) decided to eat-their-own-dog food and adopt Scrum for their own sales work. This decision was triggered by two of the companys Scrum consultants who participated once a while in the sales meetings. They tried to teach the account managers as much as possible about Scrum, in order to help them apply Scrum in Sales. Agility is a common term which is easy to understand but hard to really use. This led to a lot of questions from the sales team how curtain aspects of Scrum work in a typical software development environment and how they could use it in the sales process. It appeared quite difficult to understand Agility and Scrum fully and to convince potential customers that had never heard about it. Understanding Scrum terminology is not the same as being able to convince skeptical managers on the phone. During one of the sessions, the internal consultants, triggered the sales team to use Scrum themselves in order to gain understanding and experience. That was the time when the sales managers expressed that software development is much more predictable than sales processes. The consultants explained that they might be quite wrong, because of the unpredictable character of technology and technological solutions.

invite them to such an event. When a potential customer accepted, the account manager could then meet the potential client and start building a trustworthy relation. From the organization of these events and setting targets for the number of participants, the sales teams were, in fact, filling their own sales pipeline. Instead of bringing a potential client rapidly towards a deal, they were now taking it slow and one step at a time. C. Roll out All other sales teams followed due to the increased transparency in this first team and the enthusiasm coming from company management. The management also saw clear effects of Scrum usage in sales and started to motivate it to the other sales managers. At first, management used Scrum to guide sales teams that were performing below target to help them to get their sales processes under control. This had, unfortunately, a side effect in the organization, namely that you do not want to be in the group that does Scrum, because these are the underperformers. This was corrected quickly and now all sales teams are using Scrum. The first team, however, has an advantage over the other teams because they have learned how to use the inspect and adapt cycle of Scrum to their own advantage. V. LESSONS LEARNED The most important lesson learned from introducing Scrum to the sales teams is that sales is much more predictable than assumed. Cause and effects can be learned using Scrum and when such causal relations are known it becomes possible to control order intake for a sales team. For the Scrum consultancy unit this meant: cold calling for free awareness event, attend awareness event to meet with potential customers and detect warm leads, contact warm leads to discuss collaboration and turn into hot leads, close hot leads into deals, start delivery of services to the customer. Eventually it became clear how many cold calls will lead to awareness event participants that lead to warm leads and so on. This way made it clearer on how many cold calls are needed to make a deal. When analyzing these numbers in more detail, the team identified that out of the initial event participants, only 1 out of 10 would lead to a deal. Looking into detail, the realized themselves that in the 9 out of 10 non-deals, there should be more business. After all, these potential customers did not come to a free event for the coffee and drinks only. They realized that apparently also the step from event participation to a project was probably too large. As a consequence they proposed to also create an intermediate step towards a collaboration. So now, they are approaching event participants with the proposal to organize a workshop onsite at that company; a step more closer to a deal, but not too large to strongly object to. The consequence is that the hit-rate rises to 2 out of 10, and even these on-site workshops create some revenue. The second most important lesson learned by the sales team was the awareness that sales alone is not sufficient; total value delivery is crucial. Using Scrum and making their processes fully transparent they learned that when they make the sale but the company cannot deliver there is still no value. This started to happen when they succeeded in increasing their hit-rate. The

Figure 1. Initial Sales Scrum Board

The team appointed one of the sales managers as Scrum master to lead the stand-ups, they appointed their director as Product Owner, decided to work with weekly sprints but maintain a quarterly sales target and cycle. Finally, they drew themselves a Scrum board (see figure 1 for the initial version) to align tasks and task progress. On the left side the individual tasks for the respective services are listed. On the right side a burn-up is drawn and some individual indicators are listed. B. Just do it The team took a just-do-it approach and simply started by means of: Weekly sprints that start on Monday with a retrospective and sprint planning on the same day Quarterly focus on sales target (13 sprints till release) Inspect and adapt every week: learn the way to do it by doing it, receiving advice from the internal Scrum consultants/coaches Scrum board with burn-down for order intake Daily stand-up at 9:30 in front of the Scrum board

During the first weeks, the approach of doing Scrum in sales evolved rapidly. The usage of the Scrum board was continuously adapted. The stand-up meetings were not done daily. The team was not really triggering themselves and the appointed Scrum master was out of the office frequently. The sales team did not start the stand-up without the Scrum master, and if the Scrum master was in, they did not start on time, nor were they time-boxed at 15 minutes. Anyway, the team made a fresh start with Scrum, inspected and adapted their working processes and were learning Scrum. A major change was started from one of the consultant who proposed to organize Agile Awareness Events. These events were organized for potential customers with a potential interest in Scrum. These events lasted half a day, were free of charge, were held in their own office and were led by the respective consultant. These events started from a content motivation by this consultant. However, they had a major impact on the sales team. Before, they were calling companies to find interest in working together. This often showed to be quite a big step. The free events gave them the opportunity to call companies to

consequence was that their sales successes increased, but the consultants population was too small to directly deliver. The sales managers then understood they needed to help the recruiters. They started to participate in the recruitment process when the total number of available consultants was much lower than they could sell, for example by looking for externally available professionals they could contract on a temporary basis. This relieved the recruiters so they could spend more time on finding more people. Currently, the sales managers are even promoting cross-functional teams in which sales, recruitment, marketing and consultants take part all together. After all, delivering value to clients is much more than just closing deals. This might seem common knowledge, but it is remarkably cool to see a deal-driven team learn by themselves that they sometimes need to do totally other tasks to be successful in the end. Furthermore, the sales teams realized that instead of their primary focus on creating new business, they learned that there is more to win with existing contacts and existing customers. Also the customers that they had done successful projects with could be used as a starting point for more business because they could become the promoters of the projects to other companies. These insights arose in the teams just by having self control and using an inspect and adapt cycle for their own way of working and the end-results they tried to achieve. Also for the Scrum in sales experience, the retrospectives proved crucial. Due to the short sprints of a single week, weekly retrospectives mainly focused on the small details of that week. A monthly (or bi-weekly) retrospective proved to be more effective as they use a bit more time to reflect in more detail. VI. MAJOR ACHIEVEMENTS Since the introduction of Scrum to the sales team, the company revenue doubled. Although it is hard to really state that this was only cause by using Scrum, the general manager indicated that at least 50% of the revenue increase can be attributed to the adoption of Scrum. The company attempted to grow, so more actions were taken to achieve that. However, using Scrum was a major change because of the self-direction by the sales team, the reflection on sales process effectiveness, and by installing a frequent inspect and adapt cycle. The sales teams are more focused because they learned how their processes work and how they can control them. This results in continuous prioritization and reprioritization with focus on highest value first. This has the effect of less panicking, because there are early indicators pointing at sales fluctuations, and everyone understands what needs to be done first to have the highest impact. The sales teams also learned that even sales processes contain a clear cause-effect relation between what they do and the order intake they get. Before starting they claimed that this was not the case and that software development is different from sales. After learning these cause-effect relations they learned that they have a much larger control on their order intake than they previously understood. Trying to close a deal is like giving a demo. As team you are not a 100% sure that the client got what they needed, but a great scrum team will come close every time. A great sales scrum team will hit its targets most of the time, if not all the time.

Figure 2. Sales Scrum Board

That last few months we have even learned that business is much more predictable then ever imagined. We are able to streamline our pipeline better and better every week. Sudden increase in sales or drop in sales can be seen in advance now, so HR for example can use this information to decide to increase/decrease recruitment efforts. It is really remarkable to see that we have deployed a learning process of which we did not know it could be deployed; we learned to learn, so to speak. Doing that in weekly cycles really gave us the insight that our sales process is predictable when defining it in the stages our customers go through and by helping them to go to the next stage (or not). This is also reflected in the current Scrum board (figure 2). In the initial board (figure 1) the team only planned tasks. In the current Scrum board, also the sales pipeline is included. Every week, the team looks at the stages of each customer in the cycle and agrees on the actions (and priorities) to bring every potential customer a step further towards a collaboration. Also current availability of consultants is included on the board, as well as burn-down charts for participants to the initial events. The output is reflected in a single burn-up chart showing order intake compared to the quarterly target. Before doing Scrum we just did what we did and remarkably we did even sell sometimes. Doing Scrum we are able to relate our direct tasks to direct impacts in our customers decision process and as we are collecting data over time, we are able to predict with higher accuracy when to take action. The Scrum board is as such evolving into a better understood sales process as shown below. VII. WHAT TO DO DIFFERENTLY Although the teams are remarkably enthusiastic about the use of Scrum in sales, not everything went as smooth as the story so far might have indicated. In the early stages of Scrum deployment in the sales teams there was no real rhythm; standup meetings were not at the same time because team members were not on one location. When the Scrum master was not present there was no daily stand-up. Furthermore, planning was not done at a fixed time and without a time-box, and also retrospective were not really done effectively. As a result Scrum deteriorated slowly after initial introduction. The two internal consultants challenged the team continuously which largely helped to overcome this.

Initially there also was no real improvement cycle. The sales team looked weekly at what went wrong, but in fact did not look critically at their own way of working. Most impediments found were for example outside their control; the reasons for failing were not their fault. This changed drastically when the team was confronted during a quarterly retrospective with the A3-process [4]. They identified their largest problem and then, together, performed a causal analysis of that problem. The result was that they realized that, in fact, they were calling the wrong management levels when contacting potential customers. Furthermore, the sales team defined many small improvements during the retrospectives but these were not really followed up. One of the consultants advised them to select only the most important from a retrospective, but define concrete actions and put those as normal tasks (with the highest priority) to the Scrum board for the next sprint. Teams now define only one major improvement per week that gets the highest priority of all tasks. After all, that task makes the sprint really better than the previous sprint. They realized that nothing has a higher impact on future sales than continuously improving the sales process with the highest value improvement first. VIII. CONCLUSION Although Scrum has initially been designed for software development, there is no reason it cannot work in other disciplines. After all, value prioritization, self steering, team responsibility, joint task definition and continuous improvement, are valuable to any kind of discipline. At Toyota, for example, management teams believe that organizational routines for improvement and adaptation, not quantitative/financial targets, define the pathway to long term success [5].

The experiences described in this paper are mainly illustrative on how the adoption of Scrum can be beneficial in any discipline. Scrum can lead to escalating revenue and a sustainable competitive advantage when implemented in any part of any organization [2, 6] ACKNOWLEDGMENT The authors would like to thank all sales management colleagues at iSense ICT professionals (professional ICT recruitment agency) and iSense Prowareness(Scrum consultancy and Offshoring) for sharing their experiences and enthusiasm in using Scrum for Sales. REFERENCES [1] [2] [3] [4] [5] [6] H. Takeuchi and I. Nonaka, "The New New Product Development Game," Harvard Business Review, 1986. J. Sutherland and I. Altman, "Take No Prisoners: How a Venture Capital Group Does Scrum," in Agile 2009, Chicago, 2009. S. Denning, The Leader's Guide to Radical Management: Reinventing the workplace in the 21st Century: Jossey-Bass, 2010. D. K. Sobek and A. Smalley, Understanding A3 Thinking: A Critical Component of Toyota's PDCA Management System: CRC Press, 2008. M. Rother, Toyota Kata: Managing People for Improvement, Adaptiveness, and Superior Results: McGraw Hill, 2010. A. Sutherland, J. Sutherland, and C. Hegarty, "Scrum in Church: Saving the World One Team at a Time," in Agile 2009, Chicago, 2009.