30 Ways for Sales Leaders to Build Business Acumen
How do successful bankers differentiate themselves? Products? No. Service? Yes, but with the understanding that it’s tough to do with many prospects. Pricing? Unlikely, because most bankers freely acknowledge that (a) their employer isn’t the low-cost provider and (b) some crazy competitor can always undercut them. (An aside: Not all the “crazies” are insane; some have better profitability metrics that enable them to price transactional business at a small profit but reap the benefits of other more lucrative products and services.)
So what’s the answer? High-performing business and commercial RMs have figured out that it’s about demonstrating business acumen. Business acumen is bringing business issue insights and unsolicited financial ideas to the table. It is a significant differentiator in a competitive marketplace and is highly effective in proactive situations.
Business acumen is conversational competence in business issues; it is not the same as being a “Business Expert” or “Industry Expert”. Business acumen, as we are discussing it, is conversational competence around the industry sector changes and potential business challenges affecting businesses within that industry.
Don’t misinterpret this. Product acumen is very important, particularly in reactive situations. But it is less of a differentiator in proactive situations.
So how can sales leaders develop the business acumen of their teams? Here are 30 ideas for you to consider. Pick a few that you want to implement. If you’re not getting the response you want, try something else.
Establish a routine for pooling observations about the external environment as part of your sales meetings. Summarize 2-3 takeaways.
Require bankers to read the WSJ, local business journals and one monthly business magazine (Fortune, INC, Forbes, etc.)
Invest in Value Line and make your bankers read it and report on it at your meetings.
Review the titles of the main articles in the e-newsletter of a different industry trade association each month.
Discuss industry supplements from internal or external sources (e.g.The Economist.)
Have bankers present summaries of industry research from VerticalIQ, IBIS World, First Research or Lexis Nexis.
Stage field trips to clients’ businesses.
Sponsor round tables for clients and prospects.
Have bankers attend trade association events for key clients and prospects.
Require bankers who attend outside seminars or conferences to make presentations on what they learned, emphasizing how this will help them build relationships with customers.
Invite local business leaders to meet with your team.
Encourage bankers to keep asking clients and prospects “What’s New?” and report back to the team (see #1 above).
Read and discuss What the CEO Wants You to Know by Ram Charan.
Have bankers set up Google alerts on companies they’re interested in.
Encourage bankers to introduce COIs to COIs.
Conduct post-mortems of major wins/ losses.
Establish an internal Continuing Education requirement for all team members to build business acumen.
Set up monthly or quarterly meetings on topical issues led by a banker and an outside expert.
Discuss analyst commentary on major companies (e.g. Apple, Amazon, JP Morgan Chase).
Discuss Fed minutes (particularly as they apply to interest rates) and unemployment reports.
Invite your Special Assets Group to lead educational programs focusing on lessons learned with problem loans.
Encourage bankers to participate in local and regional organizations involved in business incubation/ economic development (e.g. Chamber of Commerce, Economic Development Authority, etc.)
Make sure bankers know how your bank makes money.
Require bankers to prepare at least 3 questions for every call they make to (a) demonstrate industry knowledge and (b) show they have done their homework.
Have High-Performers present their approach to common challenges. Have HPs role play with others on team.
Involve your Board of Directors or Advisory Board in discussions about business development/ market conditions, etc.
Follow a few good business bloggers. Encourage bankers to listen to podcasts.
Have bankers write an article for a business publication. (The preparation work alone will be worth it.)
Review an M&A transaction. Ask the CEO the following:
* What did you buy?
* Why did you buy?
* What were you seeking?
* How did you value this?
* How did this impact your value?
(Note from a Senior Manager in a mid-sized regional bank: “Driving shareholder value is the primary responsibility of the CEO and if my RMs are to be effective they need to understand what that means. They need to understand how value is created, what the components of value are, how CEOs are setting strategies and objectives that drive those components. To identify the constraints, the market requirements and environmental challenges to executing those strategies, tactics and objectives would be my expectation to say we have business acumen. As commercial bankers we tend not to connect sales growth, margin improvement, new product development, etc. with shareholder value and by not recognizing this connection gets us stuck in tactical discussions. Tactical focus keeps us from the table where strategic discussions occur and often relegate us to filling the order and seldom to crafting the order.”)
Keep thinking about what your team needs every day. Don’t assume your job is ever done.
Special thanks to the following for their comments on various drafts of this article: Dave Durham, Jeff Orner, Kevin Meade, Jim Donovan, Gerald Deetz, Kelly Condon, Kyle Kennedy, Bill McSweeney, Rob Nichols, Mark Augustyn, Jeff Judy, Bill Perotti, John Rock, Dave Hammer, Jeff Hultman, Jeff Carstens, Rick Kuci, Paul LeTourneau, Jeff Stauffer, Mike Olague, Doug Byers, Joe Witt, Harry Turton, Dianne Mercier, Glenn Wilson and John Barlow.
What do you think? What has worked for you? How have your best bankers developed business acumen? Please share your insights and experiences in the COMMENTS area below.
