Difference Between Proactive and Reactive Key Account Managementin Key Account Management /
Management styles vary between industries and companies. While two competing companies may have different management styles, there are some positions that cannot be fully functional under every style of management. Here, we’ll look at how reactive and proactive management styles fit into the role of Key Account Management in a company.
Being Reactive Versus Proactive
All management positions require some sort of response to challenges from inside and outside of the company. As a manager, you can either be reactive to new events or proactive. Reactive leadership involves taking the hits as they come, while proactive leaders will prepare ahead to either counteract something before it happens or be ready for it as it comes.
Generally speaking, proactive leadership and management is the best choice for most industries, departments, and businesses. While it’s useful to be able to react to things as they come, it’s more useful to plan for those events beforehand and be fully prepared for them.
Applying It to Key Account Management
In some management fields, reactive leadership is a recipe for failure. For Key Account Management to be a success, you need to be two steps ahead of your competitors and the market. There’s no way for you to bring extraordinary value to your strategic partners if you are not being strategic yourself.
You clients will not always alert you when they need something, even if it’s something your company would be able to provide. The truth is that your key account clients may not know exactly what an effective collaborative relationship should look like. It’s your job to look ahead and pay close attention to what they need so you can proactively strengthen the relationship, rather than reactively trying to fight fires you could have prevented.
Let’s take a closer look at both reactive and proactive Key Account Management.
Reactive Key Account Management
When you practice reactive management in a key account manager position, you’ll be hard-pressed to create strong strategic bonds between your company and key accounts. The problem is that to be truly strategic you must be proactive, not reactive. Reactive key account managers tend to lag behind industry standards and do not provide the high level of value their key accounts are looking for.
It is useful to be able to react well when circumstances beyond your control hit you out of the blue. You and your team should be prepared to give a good response. But, if this practice is how you handle most everyday situations, you are not being as efficient and productive as you should be.
If you’ve been practicing a reactive style of management for a while, your team may be good at putting out those unexpected fires that come up all the time. However, there will be frequent occurrences of failure or damage that should not have happened in the first place. By refusing to look far enough ahead and prepare for any possible scenarios, you are limiting your strategic advantage and resigning yourself to being average or below average in comparison to your competitors.
Key account clients are not looking for average partners. They’re looking for partners who can help propel them to success in their own industry. You may become obsolete if you continue to practice reactive Key Account Management with all your top clients. The worst part is that you may not know your key accounts have poor sentiments towards you until it’s too late! That’s a fire that you’ll have difficulty putting out.
- Useful for short-term response to unforeseeable events
- Keeps you thinking on your toes and flexible to move
- You may act on incomplete information and can easily make mistakes
- Many problems can be averted if you were well prepared from the start
- Not an effective strategy for bringing value to key accounts
- Creates unnecessary stress for you and your team
- High-performance teams rarely practice reactive management styles
- Larger issues may not be addressed, because you are focused on the symptoms not the cause
- Constant operation in crisis mode can make it difficult to do anything else
Proactive Key Account Management
As you can tell, reactive leadership is not ideal for Key Account Management. You should strive to practice proactive management instead. This will allow you to provide the maximum value possible to your key account clients while also keeping your own interests in mind. Rather than dealing with unexpected problems all the time, you’ll be able to develop long-term strategies about how to advance each key account partnership.
Proactive account management means you will be constantly searching for information about obstacles, challenges, threats, or opportunities your company could face in the future. Many strategic moves are missed by reactive managers because they did not see the opportunity coming soon enough. It will be your job as a proactive manager to plan ahead for every possible scenario and be prepared.
If you’re stuck in a reactive cycle, it may be difficult to start trying to work proactively. The most important first step you can take is to reclaim some of your time you lose to unproductive tasks. When given a bit of spare time, you can dedicate it to planning your next steps, strategic thinking about your industry, and building stronger relationships with individual partners.
Relationship-building depends on proactive management. For a strategic partnership to thrive, you will need to be up to date with what’s happening around your partners. You should never be surprised by something that’s happening in your industry or theirs, because you should have already planned for it ahead of time.
By keeping on top of the latest information about your partners, you may be able to supply what they need before they ask for it. Your key account clients will appreciate not having to spend too much of their own time filling you in on what’s happening and instead being able to discuss mutually beneficial strategies to proceed, based on trends, forecasts, and data predictions. This shows commitment to providing value, which is a critical component of Key Account Management.
- Avert crises before they damage your partnerships
- Give yourself adequate time to analyze and prepare for threats or obstacles
- Take advantage of opportunities others may not spot
- Gain a competitive advantage by providing key accounts with maximum value
- Prepare for trends ahead of time
- Have proper reactions prepared for every possible scenario
- Act on complete information and avoid missing important details or nuances
- Account for and manage risks properly
- Create a healthy, high-performance team with better morale
- Lower risk of losing key account clients
- Time-consuming and requires a lot of planning ahead
- You must always be thinking strategically and preparing for the future
- Poor decisions can be made if information or metrics are not accurate
None of the downsides of proactive Key Account Management negate its usefulness for your organization. When you compare reactive and proactive Key Account Management styles, there is no reasonable way to justify continued reactive management.
While reactive management may have a place in some positions or industries, a successful key account manager must be proactive to provide the type of value key account clients are looking to get from a strategic partnership.