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Global account management doesn’t work!

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8th Jul 2010
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Dr Kevin Wilson explains why the success of your global account management programme may have little to do with its structures, systems and processes.

Think about your global account management (GAM) programme. Is it producing the results that you know it could... if only? Are your global customers getting the seamless, effective, low cost, high value service they are demanding you deliver, and which you could deliver.... if only?
If your programme is delivering double digit growth, if that is reflected in profit, and if your customers give you glowing testimonials, then I would suggest that it is probably due to your ability to manipulate the system, to beg, borrow and steal resources, and to pull the right political strings, rather than to the facilitating effect of the structures, systems and processes around which you have to operate your GAM programme.
What makes me think this?
Firstly, I have been researching and writing about strategic and global account management for nearly 20 years and I have yet to encounter a programme which lived up to its own rhetoric; secondly, I note that conferences focusing upon GAM address the same issues today that were being addressed when I first became interested in the subject which suggests that little in the way of standard practice has emerged to resolve these issues as has happened in other areas like supply chain management for example; and I am also aware of the iterative nature of GAM programmes in most organisations, they seem to appear and disappear in regular five year cycles of popularity and decline.
Altered realities
These observations may reflect a number of 'realities'. The first 'reality' is that few senior executives understand the radical nature of the change necessary in order to effectively implement a global account management program, and if they do it scares them witless. Most companies grew up around products, technical specialism and geographies and managers traditionally draw their organisational power from the control they have over those areas. Organising around global customers threatens these existing power bases and short-term reward structures. This type of change is unpopular, dangerous to the change agent, difficult to implement and a threat to present year profits. Little wonder then that it receives little continuity of support from senior managers, whatever the rhetoric.
In addition, many senior managers have yet to realise that the world has changed and that despite the recession, survival depends upon adapting to those changes. They do not really believe that the customer drives their business, they do not really believe in collaboration with customers or with suppliers, they do not really believe that products and services are only incidental vehicles for delivering value to customers, and they do not really believe in the need for change. And in fairness, apart from some anecdotal evidence, the link between effective global account management, profitability and sustainable competitive advantage has not been clearly drawn.
View this against a backdrop of increasing oligopoly in the west (fewer and fewer players in most industries), supply chain rationalisation (fewer customers means fewer opportunities for suppliers and more opportunism on the part of customers), the lack of major technological innovation (the type that creates new industries), increasing competition from the east and an economic crisis caused and seemingly endlessly perpetuated by the financial services sector and one can understand a CEOs temptation to scrap what may appear to be an expensive luxury, the GAM program.
So why keep trying?
The short answer is because you have to, because you will not survive as an organisation unless you learn to collaborate and integrate with customers and suppliers at a global level. No matter what the immediate problems of recession or monetary crisis a more fundamental change underpins the global economy. It is nearly 20 years since Joseph Badoracco[1]
So why does it appear to fail so often?
The first reason why I believe most GAM programmes perform less well than they should is that senior managers have not been convinced that this is a strategic issue. They do not therefore make resources available, they are not prepared to fuel the change in organisational structure, systems and and processes that are necessary, and they are not prepared to challenge existing power basis within their organisations. While senior managers fail to become 'entangled' in the GAM process it will fail.
The second reason is that many of the things that have traditionally been associated with GAM success have little or no correlation with it. I include here many of the things that I and my co-authors have claimed in the past were directly responsible for successful GAM programmes[2]
A third issue relates to the nature or the role of global account managers. Their position in the firm, the degree of power, authority and empowerment appear to be fundamentally important as is the nature of the skills they apply to the process of value creation for customers and their own organisations. Global account managers are not primarily salespeople as has been suggested earlier, the range of skills they require to manage internally and externally without line authority transcend those of the ordinary salesperson. Some years ago Tony Millman and I coined the term "political entrepreneur" to describe the role we had observed
So, where do we go from here?
In the first instance I hope you will respond to this feature and introduce your own views about these issues.
As the discussion develops I hope that we may evolve some solutions to the problems that I perceive exist. Perhaps I’m wrong, perhaps you all have the most wonderfully effective programs that are creating enormous profits and long term sustainable competitive advantage for your organisations. If so, then problem solved. If not, then I think a focus upon the following issues could be fruitful:
  • Developing and using effective qualifying, prospecting and pipeline management systems.
  • Developing and sustaining senior management commitment.
  • Developing internal GAM marketing and promotion programmes.
  • Evolving approaches to customer value creation that create and sustain competitive advantage.
  • Reviewing and developing the role of the global account manager and GAM team members.

[1] Badaracco, J. L., Jr. The Knowledge Link. Boston: Harvard Business School Press, 1991.
[2] Wilson KJ, Speare N, with Reece S “Successful Global Account Management” Kogan Page 2002
[3]Wilson KJ and Millman T (2003) “The Global Account Manager as Political Entrepreneur” Journal of Industrial Marketing Vol 32 No 2 February pp151-158

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By vlad.wulff
16th Jul 2010 13:06

Dear Dr. Wilson,

 

I'm currently working on one of your suggestions for future GAM research. My PhD thesis is about exploring the role(s) of strategic/global account teams in joint NPD projects. It seems as if the long-term oriented account teams could be a useful support unit for the inter-organizational, cross-functional NPD teams. They can support customer knowledge processing and have a positive impact on intra- and inter-organizational coordination, communication and top management commitment. 

However, very few companies have unleashed the true potential of global account management and most firms have to cope with costly failures during the implementation process. I personally doubt that there will be alternatives to GAM in the coming decades when dealing worldwide with huge global corporations.

Vlad Wulff

 

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