23 Feb The Charybdis and Scylla of Key Account Management
KAM methodology: Too much or not enough?
A legend from ancient Greece tells about Charybdis and Scylla, two terrible sea monsters, wardens of a narrow passage on a crucial sea route. Charybdis was able to draw a whole ship into the abyss. Scilla, with its six heads, would take a toll on each crew by devouring a few of its members. The passage was so narrow, the two monsters so close one from the other, that ship captain’s had to make a tough choice on with which monster they would prefer to be confronted.
Jumping in a time lap from antique Greece to our Internet-focused time, there are two major reasons why a Key Account Management Programme sinks in the abyss of corporate failures or disappears because it has lost its few champions. The Charybdis and Scylla of KAM Programme Directors are Too Much Methodology (TMM) and Not Enough Methodology (NEM). .
What a KAM methodology is about
Before examining more closely the Charibdis and Scylla of KAM, let’s briefly review what a KAM Methodology is about. If you and your company have decided to launch a KAM Programme, the methodology helps you do the following:
- Define the scope and perimeter of your KAM iniative as well as the definition of Key (Strategic) Accounts for your company.
- Select the Key Accounts with whom to engage.
- Appoint Key Account Managers and where required Key Account Teams.
- Conduct an in-depth analysis of each Key Account and build an Account Plan.
- Execute the Account Plan, develop the relationship and manage the various opportunities.
- Define and implement the cross-functions process required to drive the engagement with Key Accounts.
- Manage talents to serve the purpose of KAM.
- Clearly measure the impact of KAM at Account and Programme level.
The scope of the KAM Methodology with its associated tools and processes is to enable the organisation implement the KAM strategy. A first key aspect is to create alignement, drive resources allocation, and define the governance of the initiative. A second key aspect is to help Key Account Managers and their Key Account Teams design and implement the Key Account Plans.
Over time, the methodology embeds the practice of KAM into the company’s DNA and contributes to its transformation.
Whatever their industry and business models, the best-in-class companies in terms of KAM all have the above-listed elements in their KAM practice. Of course how these elements are implemented may vary a lot: a good practice of KAM adapts to the industry and to a company’s strategy and culture and there is nothing like a one-fit-all approach.
Two much methodology means bureaucracy and exhaustion
The Too Much Methodology situation happens when the processes and tools used to manage the KAM Programme and the Key Account Plans are too complex and too heavy for the maturity and resources of the organisation. The Key Account Managers and their Account Teams spend too much time in a treadmill of templates and reports filling with too little impact on results.
For example, and this is a real life situation, a large industrial company had defined a lot of processes and IT systems to help manage all aspects of the commercial activity, including Key Account Management. In addition to the rich Key Account Analysis and very structured Key Account Plan, a lot of attention had been paid to processes and guidelines to help co-build and co-execute a specific action plan with each Key Account. All of this was impressive and when reviewing the tools and the associated IT system, one would have concluded that this company was doing extremely well on KAM. In fact, it was not the case. The sad reality was that each Key Account Manager was in charge of 5 to 8 Key Customers. This number was a bit too high to allow each Key Account Manager to apply the intended planning process to each account. In addition, the process and the associated tools were too complex for the maturity of the programme and of the team. What from the outside looked like an very comprehensive approach to KAM, turned to be a process-centric activity and a source of internal tensions despite the high relevance of the core ideas. We helped that company implement a simplified approach on a smaller number of accounts per Key Account Manager. A bit of re-training and on-the-job coaching accelerated the learning and execution. After 18 to 24 months, the team was able to move to the next step with a more ambitious approach.
Not enough methodology means navigating without a compass
Let’s now look at the opposite situation; not enough KAM Methodology.
This happen when a KAM programme has been launched, Key Accounts identified, Key Account Managers appointed but all the rest remains vague. For example, there is no exact definition of what “Key” means, no standardized process to analyse Accounts and build Account Plans and to drive alignment within the organisation. Far too much is left to the craftmannship of the Key Account Managers. The worse aspect; in the long run, is that nothing is made to institutionalise KAM-related best practices in the organisation.
Here is another real life example. A company in the food industry, world leader in its market, has a few Global Accounts who represent a large proportion of its revenue. In addition, these Customers are the most willing to buy the high-value part of the offering and some even want to engage in co-development. Therefore the company has appointed a few Global Account Managers, people with a broad skill set, true all-rounders with an in-depth knowledge of their own company. This is smart, but these GAMs do not share any tools, processes and best practice. Each of them operates in a specific way. While this has the advantage of empowering each GA Manager to try new things, it also has the serious disadvantage of not making KAM/GAM part of organisation’s DNA with no systematic attempts to repeat best practices that bring results. The Global Account Manager in charge of the most strategic customer sees the issue and is getting increasingly frustrated. How long will she accept to live with such a situation?
Why do these mismatches happen?
The Too Much Methodology situation, is usually the fruit of enthusiasm or of a process-centric culture.
Typically, when a KAM initiative is being started, the person or group of persons chartered to drive it go attend a KAM class or a full KAM Training Programme, most often quite expensive but not customized to the company’s context. An alternative is that a prestigious training company (not a KAM consultancy) is hired and delivers a standard introductory training. In addition, a team in charge of processes and systems elaborates the KAM tools and embeds them into a more global infrastructure. Even if there is nothing wrong in this starting point, it leads in most cases to a KAM system which is too theoretical, too big and doesn’t take into account the specifics of the company and the work context of the Key Account Managers. This is the KAM version of the proverb stating that Hell is paved with good intentions.
The Not Enough Methodology situation is usually the consequence of a very vague definition of the KAM Strategy and of Key Accounts as well as a lack of in-depth thinking on what it will take to start and operate a KAM initiative. It can also come from a view, as illustrated by the example above, that it is a better option not to give KAM a too rigid framework. This initial intention of flexibility is good in essence. However, if not managed properly it can rapidly results in confusion and a lack of replicability and sustained impact.
An interesting point is that the two situations can co-exist in the same KAM Programme. For example one can have too much methodology in the assessment of candidate Key Accounts and in the building of the Key Account Plans and simultaneously not enough – even not at all – in the way to network with the customer’s organisation to expand and deepen the relationship.
What should KAM Programme Directors do about it?
My first advice will be: act – otherwise your KAM initiative will die – but don’t rush things and don’t over-react by ignoring and killing some existing good practice. Your “game” as the person or team chartered to fix the issue will be to understand the situation and to find a realistic path to improvement either by incremental steps of via a radical change.
Here are a few recommendations to explore the situation:
- Gather facts and discuss the matter with all involved parties. You will hear perceptions as much as facts, but remember, perception is reality.
- Check your definition of Key Accounts: is it clear and solid enough? Does it reflect well the company’s KAM Strategy.
- Check the resources allocated to KAM and by Key Account. This includes checking the number of Accounts by Key Account Manager.
- Take an in-depth look at a samples of Account Plans and which results they have brought over time.
- Explore how the KAM tools are really used. Be a bit paranoid about inadequate tools, unrealistic workload or a lack of proficiency and pragmatism using the tools. This can be a touchy subject and diplomacy will help.
Defining the way forward
My final recommendations on how to define the way forward are as follows :
- Rely on collective intelligence: there is surely a lot of individual or collective best practices worth re-using and spreading.
- Show people that they have been listened to while making it clear that they are also part of the solution.
- Adapt the tools and processes introducing flexibility in the system: it is normal to invest less time on a small Key Account than on the largest and/or most strategic one.
- Re-train people but don’t rely on classroom training and use additional measures to help your staff reach an adequate level of KAM proficiency: on-the-job coaching, experience sharing and digital tools for knowledge refresh are powerful instruments for doing so.
- Define clear metrics for improvement (including people’s perceptions) and closely monitor if a positive change is taking place and if the expected results are here.
If you manage to do the above reasonably well, your KAM Programme will be sailing more safely and you will be a (legendary?) ship captain not afraid of either Charybdis or Scylla. There will be other dangers and opportunities on the route of your KAM vessel. But, like ancient Greek legends, this is another story.