Once upon a time…
…in Latin America the owner or the CEO made all decisions from what new products to launch, how to decorate the offices, what software to buy to what coffee was served to visitors.
That once upon a time is now in 2020 and it’s wasting a lot of time and making too many Latin American companies vulnerable to increased international competition from technological innovation to open markets with increasing free trade.
Even in companies with thousands of employees most matters eventually end up on the desk of the CEO or the owners of the company for a final decision.
Lack of Data (disclaimer)
There is very little general data available to support the assumption this article is based on so please take into account this is subjective and based on our own experiences doing business in Latin America.
One example is our data from the last 3 years on HR technology B2B sales. This data is mainly based on sales to companies in Mexico, Central America and Colombia. These are the numbers.
The numbers – It ain’t pretty
Closing rate where CEO or owner is the first point of contact 25%.
Closing rate where middle management is the first point of contact 2 %.
These numbers are based on contacts and meetings with more than 250 companies within the financial sector, agriculture, retail, fast service, hospitals and many more – so it’s not an industry specific challenge.
I “the almighty” am the only one who knows
However, this article is not about how to do B2B sales. There are many people much better qualified than me to give that kind of advice so instead this is written with a humble hope that owners and CEOs in our region will get inspired to look into their own organizations and determine if they too are still running their companies as “I the almighty am the only one who knows” and change it.
It is needed for the companies and for the region itself.
We are all in on it
The CEO or the owner might think this is the only possible way to do business for historic or cultural reasons or maybe he (yes it’s 99% times it’s a he) doesn’t trust that anybody else can make good decisions.
The middle management is living in a world where the risk vs. reward equation is messed up. Often, if you as a middle manager do something new and innovative by yourself, your boss will take the credit. If you fail, you’ll get fired – so it is simply not worth the risk.
This is how it goes
If the first point of contact in your B2B sales is a middle manager in a large company (1,000 to 10,000 employees that we normally work with) the organization works as a distillery for any decision or idea to pass by, especially if it includes some sort of new investment.
All the work from middle management in this process is aimed and focused on preparing and eventually presenting it to the CEO or owner for his blessing and final decision.
Often, the first sentence from a middle manager when you present something new that he or she likes will be “you know what – I love it and we should show this to this person” (another middle manager). The next middle manager will say the same and eventually all middle management will be involved.
This process happens even if your product is department or area-specific like, let’s say, HR. Still, the commercial manager will get involved as well, so will customer service, accounting, IT and any other department.
You are doomed
If just one of the other middle managers hesitates for whatever reason, you’re doomed – even if it has nothing to do with his/her area or if the person has zero qualifications to assess new technology or other products and services in regards to the overall company objectives.
After this, the combined middle management will do everything they can to minimize the risk of personal failure so they will collectively share responsibility with as many as possible to minimize the risk of being called out if the project is not going as planned.
Let’s hope he’s in a good mood
Often, the CEO or owner has something else on his mind. In most cases, no pre-briefing or context has been presented beforehand, or perhaps he’s just in a bad mood. Whatever the reason, it’s almost impossible for his own team/middle management to convince him to advance.
Perhaps it’s because the middle management will fold as soon as they receive just a slight pushback from the CEO or owner. Or perhaps it’s as simple as: It was not his idea. We don’t know, but what we do know is that enterprise sales people like us will do almost anything in our power to make the first point of contact with the CEO or owner – even if it’s just to ask for his introduction to the middle management. This way the project is already “blessed” and the middle management feels liberated and often motivated to push the project forward with speed and your chances of success increases 10 times just by meeting in that order.
What does this mean?
For us, in the world of B2B sellers, it’s just part of doing business and if we get a “no” we move on to the next company and most likely we will just try again with the same company 3 months later.
It’s worst for the company itself. The safe-playing and consensus-seeking culture within the middle management will prevent the company from reaching its full potential and even good projects or investments that should have happened, unfortunately will not.
When the CEO or owner gets older or just loses his initial good touch (happens to all of us) the company will suffer and often with serious consequences. The world is moving so much faster today and, in a company with 1,000+ people, an empowered and risk-tolerant middle management is a must.
The middle managers we meet are in general very, very talented. They have both the experience, the education and the intelligence to make good decisions if you just let them.
Please, don’t write it on the wall
The risk-taking must be promoted and motivated by the CEO and owners and only then can the collective intelligence and experience from the full organization propel the company forward and succeed in the ever changing landscape in today’s business world.
As Ben Horowitz states in his latest book What you do is who you are, “Don’t just write it on the wall or print it in the operation manual – live it.”
You have to demand from your middle management that they start believing in themselves and convince them by your actions and that you will have their back if they fail.
Consensus can be a good thing, but the consensus we see in so many companies in Latin America today is really damaging.
So, dear CEO and owner, please empower your middle management today and increase your chances of long-term success – especially when you are not around.
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