Developing Organisational Commitment to Global Strategic Account Management Programmes, Part 1

This article was first published in the Journal Of Selling And Major Account Management, Summer 2000.

Introduction

This article is the first in a series planned for the journal. They will present the processes employed by some of the world's major companies in order to address a range of problems related to the implementation of global account management programmes. They will be jointly written by the editor and a leading practitioner. They will draw upon relevant findings from the Global Account Management Research Project, and present the approach adopted by the practitioner's company in attempting to solve the problem being discussed.

The Global Account Management Research Project is a collaborative initiative managed by the Sales Research Trust in collaboration with the Strategic Account Management Association, the University of Buckingham School of Management, the University of Northern Illinois, the Southampton Business School and Warwick Business School. Details are available from the SRT: www.sales-research-trust.org and SAMA

In this, the first of this series of articles, Steve Richard of the Marriott Corporation and Kevin Wilson discuss the ways in which an international hotel group address the challenge of gaining organisational commitment to the implementation of the Global Alliance Account Programme

The issues facing companies striving to implement GAM programmes have emerged strongly from the work that has been done recently by the SRT research team. Four sets of factors impede effective GAM implementation. These are political, organisational, cultural and operational factors that are associated with the buyer organisation, the seller organisation and the connecting systems, processes and people. These are represented in the following figure and will provide the focus for this and future articles in this series.

Political

One of the major elements that have been identified as necessary for effective implementation of GAM programmes is organisational commitment. This is both in terms of senior management executive sponsorship and in terms of support from middle managers and other staff operating within all the functional areas that impact upon the effective realisation of the global strategy at local level. The adoption of GAM strategies often presents a major challenge to existing organisational structures, established practices, power bases and lines of authority.

As firms internationalise there is a tendency for control over day-to-day activities and even some strategic decisions to devolve from headquarters to Country or Regional managers. The rewards of these managers are also closely tied to the results they obtain in clearly defined geographical areas and in an attempt to foster higher levels of performance they are often encouraged to compete with their colleagues from other regions.

The adoption of global strategies requires the reorientation of power, decision-making and operational co-ordination towards the centre and high levels of co-operation between the different geographical regions and functional areas of the firm. Where local managers perceive that the implementation of global strategies pose a threat to their interests, then they are likely, either overtly or covertly, to resist their implementation. Global/local conflicts of interest are a major impediment to the effective implementation of GAM strategies.

A further political issue is the degree of commitment demonstrated by senior managers to the GAM programme. A major cause of failure is management inconsistency and a tendency to seek short-term benefits.

Cultural

Whilst the diversity of national cultures has an obvious impact upon the implementation of GAM programmes, it is the internal culture of the firm, which may have greater significance. A lack of a true global perspective, a culture that fosters political infighting and one that does not reflect a willingness to partner with customers will effectively sabotage the programme.

Organisational

GAM programmes demand organisational change. They require the establishment of global teams and the reconfiguration of existing structures to facilitate the local delivery of the global vision. Where the global vision has not been effectively communicated throughout the organisation, then reporting structures and processes are unlikely to recognise the limitations imposed by organisational complexity and cultural diversity implicit in a global operation.

The position that the global account manager occupies in the organisation is also an important consideration. If they lack demonstrable access to power and influence then they will not be taken seriously by other managers.

Practical

Further challenges are provided by a lack of integrated communications and information systems, and disjointed logistical and operational processes. GAM processes require high levels of co-ordination and integration that reflect an ability within the organisation to deliver the promised benefits to customers.

A major factor in the success of the GAM programme is effective internal promotion. In many GAM programmes that we explored, frequent and organisation-wide communication of progress and success stories was cited as vital to sustaining the effort. In addition, executive support needed active maintenance, and the GAM process needed to be ingrained into organisational routines, systems and processes. None of this can happen overnight and recognition that GAM is a long-term process has been identified across all of our research as a major message to emerge from the experience of respondents. We advocate executive engagement, and not merely executive involvement

Marriott International, the subject of this article, provides interesting insights into how one company addressed some of these problems, in particular how they developed organisation-wide commitment to the Global Alliance Programme. The material was collected during a number of conversations between Kevin Wilson and Steve Richard and is presented here in interview format.

The Marriott Experience

The Marriott Corporation has grown into one of the world's major hotel groups operating 1700 locations all over the world. Whilst the GAM Study highlighted the challenge facing all organisations attempting to facilitate the local implementation of global strategies, these are of particular significance at Marriott where the majority of their hotels are owned, not directly by Marriott, but by independent franchisees.

K.W.:How did the Alliance Programme start at Marriott?

S.R.: The Alliance Programme began some two and a half years ago with the realisation at the most senior levels within the organisation that customers were demanding more from Marriott than just hotel rooms, and that Marriott was capable of delivering much more in terms of real value to their major customers. A strategic decision was taken to reorganise the entire sales enterprise within Marriott building upon three key initiatives:

• The technology to support connectivity
• Refocus the sales force personnel on markets rather than individual hotels
• Develop a global account management programme

Whilst major customers had been asking for a single point of contact for some time, their vision of what that single point of contact could do was different from Marriott's. Initially customers view single contact as a tactical solution to their pricing problems, whereas Marriott took a much more holistic approach and perceived the single contact as a single consultant contact with the potential to address issues of major strategic importance to both the customer and themselves.

K.W.: What were the major challenges you faced in implementing this programme?

S.R.: There were many. The first major challenge breaks into two camps, internal and external.

Internally the challenges are numerous. First you have the problem of moving a traditional, primarily transactional, sales organisation toward a more total account solutions focused one. Don't misunderstand me – it is critical that every level of customer is still allocated the right level of service for their needs. However, certain high valued external assets, require an enterprise to enterprise approach. When you begin making the change from local to cluster to market to regional to national to global the perceived loss of control over sales influence by the local hotel management team can be unsettling. Yesterday they had control from budget to strategy on which customers their sales team targeted. Today they are now part of a larger organisation. Part of that larger organisation is now the GAM program which is not concerned with filling rooms at one hotel but is now being asked to take a broader view, and that involves assuming control and responsibility for those accounts completely. The local sales team is now giving up some of their power, their autonomy. This is difficult and transition can be stressful. However, they do always retain total control because they retain the ability to price and yield the product.

Then there is just the sheer size of the task of communicating across the enterprise. Even if everyone were to say yes, we will all make the change tomorrow, that still leaves the problem of communicating with 130,000 associates across the entire company, and even if you limit it to the sales folks that still leaves 5-6000 people.

When you have that many people involved there will always be those for whom this type of change is seen as just another initiative "de jour." If they do not openly oppose it and do not really support it maybe it will just die a slow death and they can go back to doing it the old way. This is not uncommon behaviour.

Another problem with having so many people involved is that it is very difficult to agree on what is the new standard of measurement for the GAM. What do we count as theirs; why is it theirs; who counts it; do others also get credit for it (double counting); what is the time over which we measure it?

Externally a major problem is to get customers to think beyond price and to change their perception about what it means to be an Alliance Account. Often the customer thinks that they have finished with the process and we feel we are only just beginning. The customer is happy with a central point of contact and some sort of pricing agreement while we want to ratchet up the relationship to go across their enterprise and figure out ways to begin creating value that is recognisable. That's a big issue.

The second issue is their willingness, or their ability to get comfortable with our being given access throughout their organisation. Our vision is to act as a professional consultant who is leveraging the enterprise to find and generate solutions and value. While almost all customers want additional value, arriving at what that value really is and what form it takes, is a very wide-open field. Often their vision is for us to respond to their direction and vision with product, service, price and advice. Buyers are also afraid that by giving us access to their organisation they may be made less valuable. When the opposite is true – we want to make them more valuable.


Look for a continuation of this article in the near future.

© 2000 Sales Research Trust, Ltd.