Background
Levi Strauss & Co. is a manufacturer of casual wear and is one of the best-known brand names in the world. Its core product, Levi’s® 501® jeans, has almost iconic status. The company also manufactures and distributes the well-known Dockers® clothing and the range of Levi Strauss Signature® brand products which are sold largely through hypermarket chains. With headquarters in San Francisco, Levi Strauss & Co. employs around 9000 people across the world.
Levi Strauss Europe (LSE) employs just over 4000 people across 21 countries. 2225 are employed in manufacturing in Poland, Hungary and Turkey. The remaining employees, just over 1800, are professional staff and support staff involved in three main activities: brand management; supply chain management and sales. The 423 sales staff, the subject of this case study, are organised in 8 major market groups across 21 European countries. Although the product range is similar, the challenge can be very different. The Spanish market for example is dominated by one large department store – El Corte Ingles. And some of the UK sales force are concentrated on key accounts (for example Selfridges or Debenhams) while others could be selling to hundreds of small independent retailers.
The sales challenge
Fashion is a fast-moving and aggressively competitive market. In late 2002, when David Macdonald, Director of Talent, Learning and Organisational Development, joined the company, it was recognised that the sales operation needed to become more consistent in its approach, and perhaps more disciplined about process. Subsequent progress has been driven by sales growth targets.
At the outset, although it was recognised that a step change in sales effectiveness was needed, there were differences of opinion as to ‘current state’. Key managers differed on their perspective of the state of the sales operation and sensitive handling and negotiation was necessary. The absence of an agreed framework for judging effectiveness led to the development, by Levi Strauss Europe’s Learning and Development team in conjunction with the consultancy group Hunter Roberts, of a diagnostic instrument known as 4 x 4 x 4. This embraces four definitions of capability (process, resource, organisation and people), four disciplines of selling (account planning, account management, selling basics and selling apparel) and four ‘times in the season’ (launch, selling, replenishment and preparation for sales launch). The diagnostic is based on fundamental principles of effective sales but is firmly grounded in the approach required in Levi’s® markets. For example, the importance of different pressures and practices needed at different times in a very short sales cycle is emphasised. In this way the diagnostic secured acceptance in the business and by the most senior executives in LSE. One of the major reasons was that the diagnostic allowed the Company to get a consistent view of the current state that everyone would recognise as reality.
The Hunter Roberts consultants used the 4 x 4 x 4 diagnostic to observe sales practices across Europe and reported in summer 2002. Much of the output must remain confidential for commercial reasons. However, amongst the findings were identified opportunities to improve sales practice across a wide range of activities. Importantly there were inconsistent results-reporting and forecasting procedures. The skills problem was therefore just one dimension. A significant proportion of the sales force had never received any training and were using practices which they had developed themselves – some of which were inappropriate or unsatisfactory.
Sales foundations training
There was therefore a need to build, install and embed the basic standards of good selling. This sentiment had powerful support at the top. The project that was developed – directly influenced by (and with the personal ownership of) the President of Levi Strauss Europe – was called the ‘LS & CO. Way to Sell’ and the goal statement, coined by the President, was ‘famous for selling in three years’. As David Macdonald puts it:
“Ownership of anything like this should never rest with human resources”.
The training contribution has been developed and refined over time. The approach in the first year has been based on four Sales Foundations modules. In turn they deal with processes and disciplines; basic skills and the sales call structure; styles and flexibility (how to sell to different types of customer) and a final module which uses a full day role play to pull together all of the skills and disciplines learned in the first three. This event (Sales Foundations part 4) also serves as an embedding tool by allowing clear insight into whether or not learning has successfully taken place. The classroom elements last one day per module and were initially taught by the specialist sales training organisation, Spence Associates, and LSE Learning and Development. It was important throughout to build a perception of ownership as lying with true sales experts, rather than internal Learning and Development.
Many of the processes introduced in the Sales Foundations curriculum are mandatory. It is hard to see how this would be acceptable without strong commitment from the sales force themselves – they could not be ‘imposed’ by human resources or training. David Macdonald emphasises that the problem has never been one of variable buy-in – generally there is considerable enthusiasm for the new approach. Questions, however, surround the skills and capabilities of a very diverse workforce operating in different circumstances and conditions.
For this reason the Sales Foundations programme is cascaded through the eight major market groups by the senior sales professionals themselves. The Sales Director will be joined by two or three of their best performing sales managers and their Human Resource Director. This small group of four or five people will be responsible for training the other sales staff in their market group. Thus some 35 – 40 people will attend the modules and will then accept responsibility for arranging its delivery to the full 400 sales staff across LSE. Moreover the modules must be delivered at the phase of the sales cycle when they are likely to be most valued as this improves retention. The underlying principles (which are reinforced through the issue of laminated cards) must therefore be sufficiently straightforward so they can be delivered locally under different circumstances.
The ‘LS & CO. Way to Sell’ is work in progress. Early in 2006, all four modules of the Sales Foundations program will be repackaged as “sales foundations in a box” – a flexible delivery package that will allow Sales Directors to roll out key parts of the training in as little as an hour at one time. A more sophisticated, higher level programme - ‘The Way to Sell’ – and master classes will be introduced in 2006. The underlying principles of the sales training approach will remain unchanged. There will be very short sessions; the material will be cascaded down through local sales management; material will be made available in different forms, ownership will rest firmly with the sales force.
Judging effectiveness
There are a number of practices in place which have been developed by the training department to reinforce its initiative. Some of these could be described as ‘evaluation by intervention’.
First, as part of the improvement in sales procedures the Sales Directors are introducing a dashboard of key metrics. These will be the key figures that determine top line effectiveness: volume of units shifted, revenue, penetration in key designated modules etc. The effectiveness of the sales force and their deployment of relevant skills will be a major contributor to this dashboard.
Secondly, in January to March 2005 a series of telephone interviews with sales staff were undertaken. In total just over 20 calls were made to ask programme participants what they found useful, which of the tools they were using and how the programme and its application could be improved. Importantly, and this is a powerful endorsement of the perceived relevance and importance of the initiative, these calls were made by four of the most senior managers in Levi Strauss Europe including the President and the Vice-President for Commercial Operations.
Further, all 14 members of the European Leadership team, the most senior staff, are carrying laminated cards with key questions on the programme. As they visit the major markets they question the sales staff and provide feedback to the training function. Sometimes this feedback is positive: “there is a great deal of interest and acceptance in this region”. Some will be negative: “there doesn’t appear to be a clear message getting across here”.
Generally the initiative to check has been well-received. However David Macdonald has not been overly concerned to apply traditional training evaluation techniques to determine effectiveness. As he puts it:
“We do not feel the need to prove the effectiveness of the training team. What any internal client is interested in is the results of the sales team. If you can build something that will affect their top-line results the sales force will monitor and measure it themselves”.