- Andrew Dugdale
The 21st Century gold-rush is on!
Updated: Jul 5, 2020
Firms race to stake their claims in the ‘final profit frontier’
Just like the original 1896 Klondike gold-rush, the miners that got there first and staked their claims to the richest seams of gold succeeded in acquiring huge new sources of wealth.
In the same way, forward looking firms today who see the wealth potential to be gained from exploiting the only remaining untapped business frontier – their sales talent, who represent the ‘final profit frontier’ – will succeed.
But, as in the Klondike rush, only the first and the fittest get the wealth.
The similarities between today’s businesses and those miners is so close as to be almost surreal:
“Gold was discovered there by local miners on August 16, 1896, and, when news reached Seattle and San Francisco the following year, it triggered a stampede of prospectors. Some became wealthy, but the majority went in vain.”
Just like today’s rapidly changing business environment, some firms are achieving massive success by being first on the scene of new sources of wealth, where others, even well founded and established firms, are falling by the wayside. Even as start-ups, many firms today are achieving the famous ‘Unicorn’ ($1bn valuation) status almost before they make a profit, such is today’s race to find corporate gold.
However, it wasn’t all plain sailing for the Klondikers, even for those who succeeded, timing and choice of route, as always, played a crucial role in success or abject failure:
“To reach the gold fields, most took the route through the ports of Dyea and Skagway in Southeast Alaska. Here, the Klondikers could follow either the Chilkoot or the White Pass trails to the Yukon River and sail down to the Klondike. Each of them was required to bring a year's supply of food by the Canadian authorities in order to prevent starvation. In all, their equipment weighed close to a ton, which for most had to be carried in stages by themselves. Together with mountainous terrain and cold climate, this meant that those who persisted did not arrive until summer 1898. Once there, they found few opportunities, and many left disappointed.”
This is highlighted best today when looking at the massive and ongoing challenges facing, for example, the retail sector, or the motor industry. So many well established brands are failing due to selecting the wrong path, or being too slow to reach today’s ‘new normal’.
Changing direction for many of these corporate behemoths seems to involve the same laborious effort as these early miners put in to shifting their equipment, by themselves, ensuring they arrived too late to even pick up the crumbs.
Even for those who get there in time, failure was still an option, often because they hadn’t got the right tools in place to sustain their push for gold. On the other hand, those who had already benefited from the early ‘easy’ wealth, benefitted even further by exploiting those miners that followed.
“Mining was challenging as the ore was distributed in an uneven manner and digging was made slow by permafrost. As a result, some miners chose to buy and sell claims, building up huge investments and letting others do the work.”
We all know that today’s business climate is challenging, but what should firms be doing to exploit the new wealth opportunities, and what does the ‘final profit frontier’ look like in the real world of business today?
This whole idea was first surfaced by McKinsey back in 1997 when Steven Hankin of McKinsey & Company first coined the phrase “War for Talent” (Ω). The war for talent refers to an increasingly competitive landscape for recruiting and retaining talented employees. In the book (β) Michaels, et al., describe not a set of superior Human Resources processes, but a mindset that emphasizes the importance of talent to the success of organizations.
So how is it that over 20 years later, firms are only now starting to wake up to the idea that talent, and in particular, sales talent, holds the key to unlocking net new sources of wealth?
There are many reasons given by firms for doing nothing, despite McKinsey showing that high performing sales people deliver 67% more revenue per annum than the performance of even ‘average’ sales people.
Just think what it would mean to your business if you could even achieve half of that growth – an extra 33% revenue per sales head per annum – sustainably – for no, or marginal, extra cost. You are now starting to visualise what the ‘final profit frontier’ looks like.
How do you get there? Where are the maps? Which route should I take? How do I know what to do?
The questions start – and if not acted upon leave you trailing in the dust of faster moving firms who see there is no time to waste.
For firms that act, there is wealth aplenty; for firms that don’t act, or act too slowly – remember the lessons of Klondike!
OK, how to start.
You firstly need to know whether your sales people are average, above average, or worse, below average. This will determine your ‘competitive position’ in your marketplace. You also need to know which average or below average sales people are capable of improving, and what it will take to improve their capabilities to make them at least above average.
The challenge most firm have is that because their recruitment processes have not been rigorous enough in the first place, they will have a normal distribution of sales people – you all know what that means – you have some sales people who always exceed target, some who regularly just about make target, some who always seem to be full of good reasons as to why they have not made target yet again. This is the concept of a normal distribution curve in the real world of selling.
The secret to breaking through the ‘final profit frontier’ is to change these dynamics, so you have only above average or high performing sales people, and you leave the average or below average available for your competition to hire.
This is the equivalent to the Klondike model of ‘exploiting your competition’. You get all the successful sales people, and leave your competitors with the lower performing group. I am sure the end result of this simple change is clear. This is the 21st Century corporate equivalent of the gold-rush.
But – how do you ensure you have the best sales people?
Tools have been on the market for some time to enable effective hiring and development of sales people – tools which map out what you have today; that spell out what your existing team are capable of achieving; identifying those who can succeed, or who can be trained to succeed – and those who need to be re-deployed; and providing a clear route map showing the optimal route from where you are today – to your new source of wealth – enhanced, sustained, reliable revenue growth per sales head for minimal or no additional cost.
Just like the supplier of tools and stores for the miners, the sources of these new mining tools are limited, but one company that has delivered outstanding success to customers for over 10 years is salesassessment.com.com. Based in the UK, salesassessment.com develops and delivers data and analytics about sales people akin to the sort of forensic analytics you would get from your accounting system, or your production system; delivering a certainty that enables development of new strategies, plans and activities that quickly drive the enhanced success a firm requires to ensure its place amongst the successful few.
If you want proof go to salesskillsaudit.com for a taster of our unique 'Core Skills' assessment. 30 minutes is all you need to find out if an executive can sell. We are so confident that we can revolutionize your sales organisation, you will receive two free assessments upon opening your account.
Don’t delay though, as just like the miners, there are only a finite amount of productive gold claims available – in this case, the supply of above average and high performing sales people is limited. According to the statistics of normal distribution, less than 50% at best, of all staff currently in, or being hired for sales positions are at, or are capable of being true wealth creators.
- Wikipedia. 2004. Klondike Gold Rush. [ONLINE] Available at: https://en.wikipedia.org/wiki/Klondike_Gold_Rush. [Accessed 4 May 2018].
- Ed Michaels, Helen Handfield-Jones, and Beth Axelrod, Harvard Business Press, 2001 ISBN 978-1-57851-459-5. The war for talent
- Wikipedia. 1997. War for talent. [ONLINE] Available at: https://en.wikipedia.org/wiki/War_for_talent. [Accessed 4 May 2018].