Executive Sponsors: their role in strategic account management
Strategic accounts matter. They are one of the most powerful organic growth generators, up to 2.4x or more as much as the growth a company can generate from accounts that aren’t strategic in nature.
Strategic accounts are also a major source of risk (a survey of 89 financial institutions showed 49.8% of income coming from the top 10% of relationships). Strategic accounts impact on the business in many ways and they need the input of senior leaders, usually at C-Suite level.
One of the most effective ways of achieving this oversight is by appointing an executive sponsor for each strategic account. The difficulty is that the role is often misunderstood and not always executed well. What should be a source of strength can often create stress and damage relationships. Well-conceived and executed, an executive sponsor programme can add real benefits for company and for customers.
In this short piece, we highlight the internal and external aspects of the role and flag up some dos and don’ts. It’s an important topic that needs to be applied differently in different businesses and we are always happy to discuss these points further.
Best practice is for executive sponsors to come from an ExCo or senior leadership team. It is good to have a multi-disciplinary approach so an FD or COO could well act as an executive sponsor. It is usually better for the direct manager of strategic account managers not to act as executive sponsor for that account. The role is much more that of a mentor rather than a manager.
The main internal aspects of the role are:
- Mentor the KAM. This should not be a “command and control” function. It is about “influence without authority”. This is more a coaching role, asking challenging questions and acting as a sounding board. This aspect of the role may well involve providing protection to the strategic account manager who is often isolated and exposed and who may need a senior colleague to defend them in difficult situations.
- Ensure strategic alignment. It’s all too easy for strategic accounts to grow an energy and direction of their own. The executive sponsor should always be looking to see how the account aligns with the overall business strategy, using her or his understanding of the over-arching business strategy to makes sure high-income accounts contribute rather than deflect from corporate goals.
- Represent the account at exec level. Strategic accounts should be visible to the C-Suite and even the board. The executive sponsor should be able to explain what is happening in an account and should introduce and champion the account manager when they report to the C-Suite.
- Manage internal tensions / “turf wars”: Strategic accounts have to operate across silos and involve many interest groups and stakeholders. The sponsor uses his or her connections, position and experience to help manage the tensions and to deal with conflicts of interest. In particular, they can help negotiate the “GO/ NO-GO points” that should be part of any strategic account programme (typically “go/no-go” with this client, with this opportunity, with this proposal, with this contract).
One global relationship leader in a global insurer estimates that 70% of her time was spent on internal matters, and only 30% client facing. This emphasis is even greater for executive sponsors – perhaps 90/10. When the executive sponsor does get involved directly with the customer it is usually in one of three ways:
- Exec to exec contact – occasional discussions with the “C Suite” on high level issues rather than operational matters.
- Reviews – chairing the annual review with the client; sometimes with the account manager present, sometimes not.
- Escalation – providing a contact point for the customer if they need to escalate a concern above the account manager.
- Support, protect, challenge and encourage the SAM
- Keep up to date with the situation
- Follow the agreed plan
- Keep confirming that the account strategy and the corporate strategy are aligned
- Communicate with the SAM before taking actions
- Champion the account with colleagues
- Give fast feedback following customer contacts
- Try and line-manage the SAM
- Take over the account team as team leader
- Get involved in operational issues e.g. price negotiations
- Go “off piste” by moving away from the account plan
- Take decisions without discussing with the SAM
- Lose interest in the account
- Reduce the credibility or status of the SAM by under-mining or side-lining
An effective executive sponsorship program plays a pivotal role in strategic account management. The implementation of this approach needs to be specific to each organisation, but we hope that these guidelines will prove helpful.
We would be very pleased to hear your comments and questions about this important role.