Mike Dionne epitomized the hotshot sales rep of the heady late-'90s info tech boom. A master of the full frontal assault, Dionne, who works for San Jose (Calif.) chipmaker Altera Corp. (ALTR), juggled 25 accounts, winning customers on complex features that only an engineer could love. But when the bubble burst in 2000, Dionne's sales dried up fast, and no amount of wheedling could persuade many of his customers to meet with him. He talked a lot but listened for the wrong things. The market had changed, but Dionne hadn't.
Six years later, he handles only seven accounts and often takes four times as long to close a deal. He listens more, too. In early June, for example, Dionne met with an exec at a Massachusetts-based medical firm for the first time. He reiterated what he had said on the phone: Altera was looking at how it should invest in the medical field. For 90 minutes, Dionne sat quietly as the potential customer described the technology he planned to buy and the obstacles he expected. Dionne never said Altera wanted to sell him chips. "You could tell [the IT exec] was jazzed," says Dionne. "He was comfortable, leaning back in his chair and talking freely."
That meeting did not close with a sale, but Altera Chief Executive John P. Daane couldn't be happier with Dionne's approach. The transformation is exactly what Daane hoped to see from a three-year effort to create a more empathetic workforce. Since 2002, Daane has spent nearly $11 million on training, using self-proclaimed "empathy consultants" to help his sales force identify with customers' situations, feelings, and motives.
This is no one-day workshop: Altera's 1,100 salespeople take four weeks off in their first year of training instead of scaring up new business. But it's worth it. "We're trying to understand and develop better customer relationships," Daane says. "We're still in the very early innings of using customer empathy to get there."
Consultants to companies as far afield as Google (GOOG), Abbott Laboratories, (ABT) and Agere Systems (AGR) increasingly are using the word "empathy" as an easier-to-understand path toward the oft-repeated, but rarely realized, goal of customer intimacy. It's especially hard in engineering-heavy cultures like Altera's, where the language of speeds and feeds has traditionally reigned over customers' real needs.
For many of Altera's folks, the training, which included personality tests and exercises that put them in their customers' shoes, registered somewhere between science and superstition. It was so foreign to many that, according to Daane, about 10% of his sales team quit rather than continue with the training. "People don't really want to see life exactly as the customer sees it. They just want to sell stuff," says Rory Clark, a consultant who works with Altera on empathy training.
But is there an ROI on empathy? If customers such as Tony Pirih, vice-president of Motorola Corp.'s (MOT) Wireless Broadband Div., are representative, the answer is yes. Pirih is so pleased with Altera's service that he has recommended the chipmaker to other Motorola division heads. Recently his engineers were struggling to fix a bug in a new broadband radio product that used Altera's chips. When Altera heard of the trouble, it sent over its experts, unsolicited. Turns out the problem was with Altera's chip, and the company patched it up within a day. "Empathy? Wow, what a weird word," Pirih says, "but I'd have to agree they're sympathetic and sensitive to the issues we have."
Daane believes empathy training goes straight to Altera's bottom line. In 2005, Altera was one of the fastest-growing chip companies in Silicon Valley, with sales that jumped 11%, to $1.1 billion. Once a one-trick pony that catered to the telecom sector, it appeared destined for destruction after sales tumbled 65% in 2001. But now its chips, which customers can continually reprogram, have become an alternative to custom designs for thousands of customers in computing, car manufacturing, and consumer electronics.
With product life cycles shortening in some industries to as little as a few months, many companies don't have the luxury of thinking about technology 5 to 10 years out and are asking suppliers to help them anticipate their needs. That requires Altera to think about market dynamics, customer strategies, and technology roadblocks. Since one person can't do all of that, companies must marshal teams of both different temperaments and skills.
That's where empathy training comes in. Guided by the credo that you must first know yourself to know others, Altera's employees first had to take the Myers-Briggs Type Indicator. A common personality test, it helped Altera form the right teams.
Then consultants took the sales force through a series of exercises to help them see things from others' perspectives. To show how different people's minds work, salespeople were shown pictures, such as one of a yellow rose, and asked to list every thought it triggered. To make a similar point, a sales manager was asked to describe what it feels like to fire someone. Some in the room reacted objectively, noting the need to punish poor performance, while others were emotional, remarking on the impact on morale.
Another method, "the hot seat," asks salespeople to imagine stepping up behind a person and looking at the world through his or her eyes. An empathy trainer playing the role of the customer gives the salesperson 10 minutes to ask as many questions as he can to "uncover" what problems the customer faces.
Such exercises can be irksome for high-tech types who might not be intimate with their softer sides. Bill Brown, for example, who was known for his aggressive sales tactics, found the hot seat method frustrating. After 40 questions, he had barely dented the surface. Clark, the consultant, suggested Brown talked too much and hardly listened for cues. Brown first called it hogwash, but later he got on board.
Beyond sales force training, Altera is creating more ways for its people to be empathetic. At its weekly customer advisory councils, the company flies in 15 to 20 customers, who are surprised to be asked to make presentations on their own strategies and future needs. Customers, unaware that Daane assigns executives as "buddies" to key accounts, say they have been happily surprised to find top Altera management attending. "It's like the difference between Nordstrom's (SWN) and Macy's (FD)," says Brian Arkin Sr., director of hardware engineering at Credence Systems Corp. (CMOS), which tests wireless systems for telecoms.
FROWNS AND FIDGETS
For a time, it looked like Altera would not win Credence's business. Sales rep Brown spent four years beating on Credence's door before receiving empathy training. Using techniques he learned about body language, he guessed from their executives' frowns and rocking back and forth that his big-picture pitches were falling on deaf ears. When he used more detailed timetables, Credence signed up. "You forget that not all people think exactly like you do, and the training absolutely helps with that," Brown says.
With Daane committed to years more of empathy training, Altera's sales force won't soon forget the human factor. The once-skeptical Brown can't wait for more. He even tried "uncovering" the goals of his family before deciding on a vacation to Disneyland. "This stuff has so much applicability to your entire life," he says. "As soon as you see it working, the idea of touchy-feely is out the door."
By Cliff Edwards