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Though they worked unneurotic for a year, Peterson struggled to bridge the distance between vane and herself. Over lunch, Peterson praised Wows efforts to broaden his professional skill passel by attending weekend gross revenue seminars and networking with colleagues to better understand the condescension. These efforts, she noned, surely contri besidesed to his success in retaining his large, but and, lymph gland. Peterson then reminded Www of her c formerlyrns. Fred, Id Like to remind you that your primary focus should be on sweet pipeline. It seems as If you re spending too much time managing your one client, and thats not your job. Peterson continued, As Vive mentioned before, Id comparable to be kept abreast of your development efforts, so I know when and if you need help from me, or somebody else In the comp any. I expect you to summarize your efforts every few days on our online gross sales tool, like everyone else on the aggroup. If you spent more time in the o ffice, Id have a better sense of your business. Plus, Im positive youd glean some helpful selling techniques from your colleagues. Finally, Peterson questioned the value of the expensive addition go Www had interchange to his client so early In the relationship.Www assured Peterson that all tax booked?including additional services? originated at his clients request. He emphasized that the networking heed done in the Chinese community was about to impart off he expected to sign three major newly clients In the coming quarter. Www then stated that, because he was about to become the close to successful sales executive In the Plano office, he needed his feature sales assistant to answer his phone and perform administrative tasks. Peterson hoped her reflexion didnt register her dismay at Wows request.Only the most superior salespeople at accounting system, some of whom Juggled more than 30 accounts, had their own sales assistants. The rest of Accountancys salespeople shared assistants. What was Www thinking? Solely as a basis for set discussion and not as an endorsement, a source of primary data, or an illustration of effective or ineffective management. Although based on real events and despite occasional references to actual companies, this case is fictitious and any resemblance to actual persons or entities is coincidental. Copyright 0 2013 President and Fellows of Harvard College.To order copies or request authority to produce materials, call 1-800-545-7685, write Harvard Business Publishing, Boston, MA 02163, or go to http//www. Hobs. Harvard. Deed. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for use only by Chugging You in Fall 2014 Engaging and Empowering People taught by Bobbie Ships Texas Christian University from September 2014 to October 2014. 913-560 Wendy Peterson Accountancy basis Accountancy was fou nded in 1988 by Will Gleason, a former accountant, and TravisHarriman, a software program engineer. Gleason, a senior executive at a large national accounting sure, felt that many of the back-office accounting functions his firm provided to clients could be automated. Gleason envisioned, and Harriman built, a back-office accounting software produce de subscribe for what they felt was an undeserved market small- and medium-sized businesses, particularly those with ambitious enhanceth targets. It was easy for businesses to adapt the Accountancy product as their needs changed or expanded, give thanks to the modular design of the software and a comprehensive suite of add-on options.Gleason cultivated relationships with local investors and gauge capitalists to gain exposure to possible clients. The founders believed that their competitive advantage would come not only from their superior software but also from their strong client relationships, a combination that companies reserv ation off-the-shelf accounting products or large accounting firms were unlikely to replicate. The founders also believed that a flat organizational structure and collegial finish would minimize office politics, strengthen employee morale, and heighten company performance.Soon their business model began to pay off. The product was sticky once businesses implemented the software (a one-time installation cost between $25,000 and $ deoxycytidine monophosphate,000 depending on the scope of desired services) and trained employees on its use, they were likely to renew their annual contracts. Accountants client renewal rate was 25% above the industry average, and most clients retained services for at least four years. In 2010, the firm earned nearly $100 million in revenues, and employed more than 400 employees in ten regional offices located in southern California, Arizona, New Mexico, and Texas.That same year, however, the proliferation of inexpensive, off-the- hell accounting software, combined with a faltering economy, drove mickle revenues three of its regions. The founders retired and the new CEO was determined to reignite the companys growth. He replaced the vice death chairs of sales in a number of offices with the companys most enterprising young sales directors. Each was given aggressive growth targets. If the revenue goals were met or exceeded, the new leaders and their sales teams would receive a substantial bonus.Wendy Peterson was one of the promoted employees. She was named vice president of sales for Accountants Plano, Texas, office. After consultation with her superior, one of four regional senior vice presidents of sales, she agreed to grow the revenues of her underperforming office by 40% in two years. Accountancy Sales Organization Salespeople (generally referred to as sales executives) invested a significant amount of time getting to know clients and their businesses before submitting an initial proposal and act the account over to a dedicated service team.Once a member of the sales team signed or renewed a client contract, day-to-day responsibility for product implementation and service transferred to an Accountancy account service am. Sales executives communicated with account service teams to keep abreast of implementation challenges and of potential add-on services that their clients might need. For new salespeople, the initial focus was outreach. Although some of the salespeople came from competitors, most came from sales or product management positions in other software or services Wendy Peterson 913-560 companies.New salespeople were expected to mine and leverage their in-person networks and to research, cold-call, and cultivate their own lists of local prospects. Unlike most of Accountants employees, who were salaried, annual compensation for sales employees (about 20% of the companys employees) include a base salary component (50% of annual compensation) and a commission component (50% of annual compensation). Escalating incentives existed for portentous target revenue goals.If sales employees met or exceeded their annual financial targets and stated professional development goals, they were qualified for base salary increases. Although the salespeople mostly operated independently of each other, there were regional sales employee received a flat bonus payment ($7,000 in 2010). Total insemination ranged from $100,000 for first-year salespeople to $1 for Accountants most experienced sales managers. Background Peterson Joined Accountancy after graduating at the top of her Ivy League university class in 2000 with a degree in economics.A tireless worker with a curious mind, she excelled as a young manager on a series of account service teams and earned stellar reviews from both clients and colleagues. By age 28, Peterson was managing account service teams herself. Said Peterson After six years working on and managing client engagements, I was ready for a change sales seemed a challenging, and potentially curative, opportunity. I was nervous, though, about modification in with the sales organization after all, Id never worked in direct sales or closed new business.So I read books on varying sales strategies, attended weekend sales seminars, and bespeak to shadow two of the most successful sales directors (a small number of sales executives were promoted to the title of sales director to reflect their exceptional performance or tenure) in my office for the first month. Vive often been draw as a doer?if I see a chance to help, I dont Just conjure an idea and wait for someone else to take charge. I like to do things myself. After Joining Accountants sales team it struck me that our senior sales staff benefited most from recurring revenue from our largest, longstanding customers.Their business was steady and required little effort. Junior-level sales executives like me, on the other hand, worked overtime to land new accounts and earned far less than experienced sale s directors. As the pressure from management to drive new business increased, I spearheaded a volunteer mentoring program between Junior and senior sales professionals. The more experienced professionals imparted sales and client management wisdom to their Junior counterparts, in return for free care on large accounts.Camaraderie spiked and, I think, an unexpected benefit was that focusing on new business again invigorated senior members of the sales team. I was one of the few sales employees who brought in oodles of new business to Accountancy in 2008 despite the global financial crisis soon after I was promoted to manage the Plano sales organization. To me, the Plano team I inherited seemed disengaged I believed that changing the culture?by making my team closer and the office more collegial?would boost productivity and revenues. Under my direction, our performance improved, and the team exceeded 2010 targets for new business by 15%.