The ability to influence a key account is not the same thing as having the ability to lead the solution development process. Effective account management leadership involves the strengthening of the relationship in the pursued of shared values, vision, and ideals.
This ability to influence has the ‘power’ to create added value for any system stakeholder but often faces challenges inherent in the business model. An imbalance in power can weaken the relationship.
How leadership is evaluated, and its ability to drive value, is often determined by its ability to drive shared benefit. Placing too much emphasis on demand when developing a business model can overlook issues that impact key value drivers, impacting:
- Cost, &
Resource starved businesses increasingly run the risk of pursuing goals with diminishing returns in trying to attract (and keep) more customers.
When this happens business model & supply chain alignment, cost vectors, and quality drivers strain the business resources, strategies, and efforts. The result is often for team’s to work harder instead of smarter, with product and process outputs increasingly delivered out of scope.
Evaluating Account Performance
Unfortunately, the scenario just described is all too common. Efforts to delay a crisis often include:
- Emphasizing some metrics while de-emphasizing others
- Ignoring slippage in core drivers and performance areas
- Maintaining the appearance of output alignment which interferes with the business’ ability to deliver decisive corrective responses
Key account management (KAM) often emphasizes the following ten core drivers when evaluating how to influence constructively (Woodburn & McDonald 2011, p86 ). The importance of these areas is not limited to external key account management but also incorporates internal business processes and efforts to support business model integration and alignment:
The following tool can be used to evaluate core performance drivers (alignment, cost, quality) fit with the following business vectors. Business strategy and goal alignment between the customer and seller is essential for an effective, and successful, relationship to exist.
Most deliverables and improvements require involvement from both the buyer and the seller. If the buyer is unable to participate the deliverable needs to be evaluated for fit before the seller commits.
|(rate 1 worst – 5 ideal)||Alignment||Cost||Quality|
|Policies & Procedures|
|Regulations & Laws|
|Relationships, Roles, & Job Descriptions|
|Coaching, Training, & Communication|
|Values, Mission, & Vision|
The Customer Relationship Development Model
The following model is often used to evaluate the stage of the relationship between the buyer and the seller. The higher stages include more opportunities for the relationship to be strengthened. Key accounts are identified when the buyer and seller relationship contains characteristics and opportunities available at stages 4 and 5.
Seller’s need to be clear on how the buyer evaluates the current relationship and their goals for the future. Establishing goals not supported by the buyer can prove not only ineffective but costly.
Understanding the Customer’s Business Model
Although not all accounts will provide the opportunities available to the higher stages they can still create value. Understanding the customer’s business model is crucial towards identifying the necessary tools, strategies, processes, and solutions needed.
Enterprise architecture includes the business and technology tools, assets, and resources used to run the business. Alignment is crucial.
The business culture includes the traditions, beliefs, assumptions, and rituals of the company. The business culture has a significant influence over how things are done, whether things are done, and the tools that are available.
Product innovation involves the steps necessary to understand what functions and features will be considered useful to the customer. This includes both products and services. Misalignment with the customer needs can be costly.
Operations innovation includes the processes, tools, and strategies deployed every day to keep the business running. Improvements in this area distributes efficiencies and gains throughout the system.
Supply chain innovation involves improvements to how the business model and relationships are interconnected. Improvements to the supply chain are shared with all the inter-dependencies, and customers, down stream.
Strengthening Business Model Alignment
Business model misalignment, and the deterioration in outputs, can no longer be ignored. It costs the country millions (and more in the public sector) in lost productivity and cost overruns. The following questions are often used in change management efforts and can be useful tools
for increasing engagement, business model alignment, and process performance evaluation:
- What is our vision for the future?
- What is the gap between now and the future?
- What do we need to do to close this gap?
For some businesses the following questions may also be useful:
- Why do we do ‘this’ this specific way?
- Is ‘this’ approach still valid? Or have requirements changed?
- What is your company’s commitment to supporting project success?
The last question should be used cautiously as it can surface vulnerabilities in the buyer’s business model and organizational structure and potentially alienate the seller. But it also can provide significant insight into the inner workings and capabilities of the buyer’s company as well as their commitment to the buyer to seller relationship’s growth. Red flags should be evaluated carefully.
The biggest enemy of performance and requirements deviation is transparency. Information is no longer the tool of just the corporate suite and needs to be debated openly. For example: An international retailer targeted as a potential key account published an RFP for a senior project manager to complete 140 sites in 13 months. An existing vendor would usually deliver 3+ projects at a time. If the vendor became aware of the new contracting model (to complete all at once, with a contractor) the key account management approach/ status would need to be evaluated.
The following documentation and planning tool can be used to draft out the team’s initial strategies for improving management of key accounts.
How is your team supporting effective key account management? How is feedback being incorporated into the business’ customer development and engagement strategy? Share your comments below.
Travis Barker, MPA GCPM
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Wilson, K., Ph.D. (n.d.). Managing Customer Relationships. Retrieved February 17, 2018, from https://www.questteam.com/resources/article.html?id=wilson_article_1
Woodburn, D., & McDonald, M. (2011). Key account management: the definitive guide. Chichester: Wiley.