Sales Force

"When I went back to work after the seminar," Rodin says, "the situation looked absurd. And that was scary as hell. I just kept saying: 'I don't know what to do, but we've got to change.'"

Rodin crisscrossed the country in an aging corporate jet, looking for answers. "What do we want to be?" he'd ask small groups of managers. "What's in the way?" It didn't take long to identify the biggest barrier: how Marshall measured results and paid its people.

It was bizarre, really. The company had spent years developing microscopic measures of internal performance -- how Marshall was doing against its plans, how groups inside Marshall were doing against each other. But it had almost no measurements of external performance -- how well it was meeting the detailed needs of its suppliers and customers.

The system had to change. "We eliminated commissions, incentives, promotions, contests, P&Ls, forecasts, budgets, the entire functional organization chart," Rodin says. It was a radical move. Contests and commissions -- internal competition -- were a way of life in the industry, the universal motivational tool. Rodin was hammered when he unveiled the plan in an open letter to the industry. One competitor accused him "of kissing Deming's ring." Another called the system "communistic." Electronic Buyers News, the industry bible, published a biting editorial.

Even the CEO's wife was a skeptic. "I remember the night before we made the change," Rodin says. "I was lying in bed, kind of tossing and turning all night. My wife finally asked me what was wrong. 'Oh, big stuff at work,' I said, 'lots of changes.' 'What changes?' she asked. 'I'm taking all the salespeople off commission tomorrow.' And she screams, 'What are you, crazy?'"

But Marshall's sales staff took to the new system. Denise Stoll, 41, was one high-profile convert. Stoll is one of Marshall's sales superstars, an account manager in Silicon Valley. She thrived under the old system. Her key account was SynOptics, the networking-equipment manufacturer that later merged with Wellfleet to create Bay Networks. She took the account from zero to $26 million, a major achievement with big commission implications. In fact, Stoll says she took "a pretty dramatic cut" when Marshall abolished commissions.

A few years later, though, Stoll experienced the upside of the new system. In 1996, Bay Networks announced it would outsource manufacturing. Literally overnight, Stoll lost her most lucrative account -- and the source of her big commissions.

"I went from shipping millions of dollars a month to Bay Networks to shipping a few hundred thousand dollars," she says. "But under the new system my income didn't change. And why should it? I still call on engineering at Bay Networks; I work hard to get my components designed into their products. We do the same amount of business with them -- we just do it through contract manufacturers."

Dan Kates, 29, another Marshall salesperson in Silicon Valley, says the new system has a second benefit. It encourages salespeople to invest months, even years, prying companies away from other distributors and turning them into Marshall customers. Kates made big investments in WebTV, the consumer-electronics startup recently acquired by Microsoft. A year ago Marshall did no business with WebTV. Now it does about $1.5 million a month. Next year Kates thinks Web TV can generate as much as $4 million per month.

The new system "is an advantage to me," he explains. "I can look out for the interests of the customer. I can take the long view. I can invest time with a new customer without worrying about paying my next gas bill."

Anything, Anytime, Anywhere

In early 1993, when Rob Rodin convened a strategy session with Kerry Young, 33, his newly hired director of distributed computing, he didn't talk about the Internet. He'd never heard of it. He didn't even talk about Marshall's outdated computer systems, the official subject of the meeting. Instead he described his late-night fears about preparing Marshall for a future he couldn't yet define. Rodin understood that the traditional middleman was a dinosaur, too stupid and slow for the pressures it was facing.

But he didn't know what Marshall should become. He suspected information technology would play a key role. "It was obvious there were ways to link things with computers," he remembers. "But no one had figured out what should be at the end of the wires or how to make them go."

Then, in December 1993, Young showed Rodin Mosaic, a Web browser that had been invented at the University of Illinois and was being commercialized by a still-obscure startup called Netscape Communications. Ninety days later "Marshall on the Internet" made its debut. It was just a start, but it was the future. Customers would no longer depend on paper catalogues published quarterly -- a sales tool that was simultaneously too bulky and too flimsy, and obsolete the moment it appeared.