CXO’s have a storied reputation as demanding strategic captains, heralded for their no nonsense, goal-oriented, fact-seeking, numbers-driven personalities. “I don’t want your sales pitch. Let’s get down to tachlis!
But things aren’t always what they appear. When it comes to making choices, CXO’s are prone to the same flawed thinking and logical foibles as those down-rung on the corporate ladder. “In practice, of course, all kinds of complications occur when major decisions are being made,” according to Hugh Courtney, Dan Lovallo, and Carmina Clark, authors of a Harvard Business Review article, Deciding How to Decide (November, 2013). Still, business developers are reverential to the talent in the C-suite. After all, CXO’s weren’t awarded a top spot on the org chart by demonstrating wishy-washy befuddlement.
The myth of the CXO as an effective decision-maker has persisted because it gives business developers an odd comfort: that senior executives are logical, informed, process-bound choosers, focused on making rational selections. Sellers hew to that archetype by engaging CXO’s with facts, facts, and more facts – including success stories, case studies and ROI analyses. Vendors assume that by owning a drop-dead unassailable argument for buying, their value propositions will become so compelling that the status quo will scream out for change, and inferior competitors will be vanquished. “Salespeople must always focus on proving the business case,” one sales VP told me. Nifty advice, particularly when one can reliably expect that the person doing the deciding is sensible.
Toss that assumption out the window, if you haven’t done so already. Salespeople often maintain the hope that entreaties to prospects will be given a fair, reasoned, and methodical hearing. That’s a delusion. What a vendor can count on is that marketing “fact” will get shredded, chopped, stomped on, misrepresented and misunderstood as it moves through a decision process– a term I use loosely in this context. If you’re mapping one out, try this exercise: draw the funkiest flowchart you can think of, including disconnected boxes, arrows pointing to nowhere, and lines going off into infinity. That’s the closest representation you can create for how the most thoughtful, persuasive reasons-to-buy will be vetted.
I know. This seems a tad jaded and perhaps unnecessarily cynical. Now that I think of it, I’m sure I’ve notched a sale or two in which every important buying criteria was made known, and the purchasing steps proceeded as stated, according to plan. I just can’t recall the last time that has happened. The point is, uncertainties, confusion, emotions, biases, vendettas, and internal politics aren’t the back story of decision-making, they are the plot. What about “the documented buying process,” “the stated selection criteria,” and “names of key decision makers”? Helpful to uncover, for sure, but think of them like façades on a Hollywood movie set. What happens behind the scenes motivates and moves the purchase.
According to the Harvard Business Review article, there are four hazards, or complicating factors, in decision making:
#1: Decision makers don’t know everything they need to know – but they assume they do.
“Particularly relevant here are the well-established facts that decision makers are overconfident of their ability to forecast uncertain outcomes and that they interpret data in ways that tend to confirm their initial hypotheses.”
#2: Cognitive bias permeates the process.
Examples include confirmation bias (people see what they already believe), bandwagon effect (people follow the crowd), availability heuristic (the story that is remembered overrides everything else), anchoring (the first information received becomes the most influential), cheerleading bias (the desired selection becomes the one that is championed).
#3: Organizational processes impede collaborative decision-making.
“Organizations need to develop general protocols for decision making, because political and behavioral pitfalls are rife when money or power is at stake.”
#4: Decision makers tend to rely on a single tool.
“Most important decisions involve degrees of ambiguity and uncertainty that those approaches aren’t equipped to handle on their own. It’s often useful to supplement one tool with another or to combine tools.”
As Jill Konrath wrote in her newest book, Agile Selling, “Without deep buyer understanding, it’s increasingly difficult to get business.” Buyer understanding goes well beyond discovering the often-theoretical steps that an enterprise purportedly uses for conducting procurements, or compiling a list of “key influencers” to call on. Knowing the decision complications that routinely occur will help demystify the tangled pathways that vendors experience when working with buyers.
