HBR: How Adobe Structures Feedback Conversations

Are you providing yours directs’ feedback on their performance and opportunities to develop their growth?  Are you having a conversation about expectations? Below is a blog from the Harvard Business Review by David Burkus:

How Adobe Structures Feedback Conversations

Providing employees feedback on their performance and opportunities to develop is one of a manager’s most important tasks. As important as it is, however, it can often get pushed down pretty far on the to-do list. Many leaders face a swarm of pressing deadlines; moreover, feedback conversations can be awkward. Even the preparation for such conversations can make managers feel stressed. It’s easy to fall back on the annual performance review to make sure at least one conversation happens. It’s no wonder many employees report getting no other feedback throughout the year.

But giving regular feedback on performance doesn’t have to be difficult. In fact, there are a few relatively simple formats or templates to help guide the conversation and ensure the discussion is meaningful (and hopefully more frequent than once a year).

One of the best examples I’ve noticed is at Adobe, a company that became notable recently for ditching their performance appraisals and replacing them with informal “check-in” conversations. But, as we’ll see, their framework for a check-in conversation works well for any situation where relevant and valuable feedback is the goal.

For Adobe, a good check-in centers around three elements of discussion: expectations, feedback, and growth and development. When each of these areas have been discussed, then managers and subordinates know they’ve had a meaningful conversation.

  1. Expectations refer to the setting, tracking, and reviewing of clear objectives. In addition, expectations also mean that both parties agree on roles and responsibilities for the objective, and also are aligned in how success will be defined. For Adobe, employees were expected to begin the year with a simple, one-page document outlining the year’s objectives in writing. Regular check-ins became opportunities to monitor progress toward those goals and well as review how relevant they might still be in light of recent events. Regardless of what your own team may start the year understanding, taking the time to regularly review what the goals are, how close individuals are to achieving them, and whether or not those goals need to be changed is a vital step in making sure you arrive at the end of the year (or whatever cycle goals are measured by) with everyone in agreement about how successful a period it has been.
  1. Feedback refers to ongoing, reciprocal coaching on a regular basis. Feedback is the logical next step from a discussion about expectations. Once the goals are clear, and how close to meeting them is established, feedback is how employees learn to improve performance and more quickly achieve their goals. For Adobe, it was important to emphasis the reciprocal nature of feedback. Managers were providing performance feedback but also needed to be open to receiving feedback themselves. Specifically, feedback conversations provided answers to two questions: 1) “What does this person do well that makes them effective?” and 2) “What is one thing, looking forward, they could change or do more of that would make them more effective?”
  1. Growth and Development, the final element, refers to the growth in knowledge, skills, and abilities that would help employees perform better in their current role, but also to making sure that managers understood each of their employees’ long-term goals or career growth and worked to align those goals with current objectives and opportunities. Instead of a simple “year in review” approach, inclusion of growth and development as one element of a “Check-In” ensures that the conversation is centered on future development of employees … not just arriving at a score for the previous period. A vital part of making check-ins successful was not just the forward-looking nature, but also the frequency. If you’re checking-in regularly than it’s much easier for both managers and employees so see progress.

And that final piece might be the key to why check-ins work so well. Researchers Teresa Amabile of Harvard Business School and Steve Kramer conducted a multi-year tracking study in which hundreds of knowledge workers were asked to keep a daily diary of activities, emotions, and motivation levels. When they analyzed the results, the pair found that progress was the most important motivator across the board. “On days when workers have the sense they’re making headway in their jobs, or when they receive support that helps them overcome obstacles, their emotions are most positive and their drive to succeed is at its peak,” they wrote of their findings. “On days when they feel they are spinning their wheels or encountering roadblocks to meaningful accomplishment, their moods and motivation are lowest.” Surprisingly, however, in a separate study of 600 managers, Amabile and Kramer found that managers tended to assume progress was the least potent motivator — citing things like recognition and incentives as stronger motivators.

Looking at the three-elements of a meaningful check-in, it’s easy to see why the system would be more motivating and performance enhancing than the norm. While most performance appraisal systems are backward looking, assigning what is essentially a grade to past performance and spending only minimal time focused on the future, this format centers around highlighting the progress made and the skills and abilities needed to make further progress. Both are mechanisms to provide feedback, but one appears far more motivating.

 

Perhaps most importantly, the beauty of a check-in conversation is that it doesn’t automatically mean abandoning all of the other mechanisms required by your organization. Well-intentioned managers can start holding check-ins with or without an overhaul to the performance management system being used. At its core, it’s a helpful tool for having a more meaningful conversation… and using it regularly might even make the annual performance review discussion more meaningful as well. If you’re looking for a way to provide more meaningful feedback and better develop the people on your team, talking about these three things (expectations, feedback, growth and development) is a great start.

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HBR: Organizing a Sales Force by Product or Customer, and other Dilemmas

Sales can be full of double-edged swords. How do you leverage the edge you want and blunt the ones you don’t? Below is a blog from the Harvard Business Review by Andris A. Zoltners, Sally E. Lorimer, PK Sinha.

Organizing a Sales Force by Product or Customer, and other Dilemmas

HP announced in March that it was combining its printer and personal computer businesses. According to CEO Meg Whitman, “The result will be a faster, more streamlined, performance-driven HP that is customer focused.” But that remains to be seen.

The merging of the two businesses is a reversal for HP. In 2005, HP split off the printer business from the personal computer business, dissolved the Customer Solutions Group (CSG) which was a sales and marketing organization that cut across product categories, and pushed selling responsibilities down to the product business units. The goal was to give each business unit greater control of its sales process, and in former CEO Mark Hurd’s words, to “perform better — for our customers and partners.”

The choice — to build a sales organization around customers or products — has vexed every company with a diverse product portfolio. It’s not uncommon for a firm such as HP to vacillate between the two structures. And switching structures is not always a recipe for success.

Let’s rewind the clock to 2005 at HP, before the CSG was eliminated. Most likely, those responsible for the success of specific products (say printers) were often at odds with the CSG. The words in the air may have been something like “Printers bring in the profits, and our products are not getting enough attention” or “The CSG people want customer control, but we have the product expertise.” And from the CSG sales team, we can imagine the feelings, “We are trying to do the best for HP and for customers. The printing people are not being team players.”

Especially when performance lags, people in any sales structure see and feel the disadvantages and stresses that their structure creates. But they often see only the benefits of the structure that they are not operating in. The alternative looks enticing. Unreasonably so.

HP’s dilemma illustrates one of many two-edged swords of sales management. These swords are reasonable choices that sales leaders make that have a sharp beneficial edge, but the very nature of the benefit is tied to another sharp edge that has drawbacks. Unless the undesirable edge is dulled, the choice cannot work.

Consider a choice like the one HP made recently to organize its sales force by customer rather than by product.

  • The beneficial edge: Salespeople can understand the customer’s total business, can cross-sell and provide solutions (not just products), and can act as business partners rather than vendors for their customers.
  • The undesirable edge: Salespeople will have less product expertise and focus. And it will be difficult for the company to control how much effort each product gets.
  • Dulling the undesirable edge: The company could create product specialists to assist customer managers (although this would add costs and coordination needs, and would work only if salespeople and the culture were team-oriented). It could also use performance management and incentives to manage effort allocation.

    Sales is full of such double-edged swords. For example:

  • If you hire mostly experienced people, they will become productive rapidly. But they will come with their own ways to do things and may have trouble fitting into the new environment.
  • If you drive a structured sales process through the organization, things will be more transparent and organized, and coordination across people will be easier. But out of the box thinking will be diminished, and managers might use the defined structure to micro-manage their people.
  • If you give salespeople customer ownership and pay them mostly through commissions, you will attract independent, aggressive salespeople and encourage a performance-oriented culture. But this will discourage teamwork and create a brittle relationship based mostly on money.

The effective sales leader recognizes the two edges of each of these (and other) choices. He or she works to sharpen and leverage the good edge, while dulling the impact of the other edge. The overly optimistic leader who sees the benefits of only one choice will lead his or her sales force into peril!

We have offered a few examples of double-edged swords of sales management. There are many, many more. Do add to our list, and tell us how you leverage the edge you want, and blunt the one you don’t.

 

SMART Goals

The practice of goal-setting is helpful in the pursuit of happiness. Psychologists tell us that people who make consistent progress toward meaningful goals live happier, more satisfied lives.

If you don’t have written goals, I encourage you to make an appointment on your calendar to work on them. You can get a rough draft done in as little as an hour or two. Few things in life pay such rich dividends for such a modest investment.

A SMART goal is an acronym for achieving your commitments. Below are the five meanings:

  • Specific—Your goals must identify exactly what you want to accomplish in as much specificity as you can muster.
  • Measurable—If possible, try to quantify the result. You want to know absolutely, positively whether or not you hit the goal.
  • Actionable—Every goal should start with an action verb (accomplish, organize, increase, develop, budget, etc.) rather than a to-be verb (am, be, have, etc.)
  • Realistic—A good goal should stretch you, but you have to add a dose of common sense. Go right up to the edge of your comfort zone and then step over it.
  • Time-bound—Every goal needs a date associated with Make sure that every goal ends with a “by when” date.[1]

Your next steps are as follows:

  1. Write them down. This is critical. There is huge power in writing down your goals.
  2. Review them frequently. Writing your goals down makes them real but the key is to review them on a regular basis and break them down into actionable tasks.
  3. Share them selectively. Sharing them with those that are important to you and someone to whom you can be accountable.

[1] Michael Hyatt and Daniel Harkavy, Living forward : a proven plan to stop drifting and get the life you want (Baker Books, 2016), 95

HBR: Developing Employees’ Strengths Boosts Sales, Profit, and Engagement

As a manager or owner, are you focusing on your employee strengths? What are you doing to strengthen your employees’ performance? Below is a blog from the Harvard Business Review by Jim Asplund and Brandon Rigoni, Ph.D.

Developing Employees’ Strengths Boosts Sales, Profit, and Engagement

Should companies primarily focus on playing to the strengths of their employees or help them improve on their weaknesses? This question is particularly important today, given low workplace engagement and higher expectations from workers about what a great job entails.

Gallup has studied thousands of work teams and millions of leaders, managers, and employees for more than five decades. We’ve found that there’s significant potential in developing what is innately right with people versus trying to fix what’s wrong with them.

We know, for example, that the more hours a day adults believe they use their strengths, the more likely they are to report having ample energy, feeling well-rested, being happy, smiling or laughing a lot, learning something interesting, and being treated with respect. In addition, people who use their strengths every day are more than three times more likely to report having an excellent quality of life and six times more likely to be engaged at work.

Focusing on employees’ strengths does more than engage workers and enrich their lives, however: It also makes good business sense. Gallup recently completed a large study of companies that have implemented strengths-based management practices. The companies we studied develop what comes most naturally to people — e.g., having employees complete the CliftonStrengths assessment, incorporating strengths-based developmental coaching, positioning employees to do more of what they do best every day, and the like.

The study examined the effects those interventions had on workgroup performance. It included 49,495 business units with 1.2 million employees across 22 organizations in seven industries and 45 countries. Gallup focused on six outcomes: sales, profit, customer engagement, turnover, employee engagement, and safety.

On average, workgroups that received a strengths intervention improved on all of these measures by a significant amount compared with control groups that received less-intensive interventions or none at all. Ninety percent of the workgroups that implemented a strengths intervention of any magnitude saw performance increases at or above the ranges shown below. Even at the low end, these are impressive gains.

  • 10%-19% increase in sales
  • 14%-29% increase in profit
  • 3%-7% increase in customer engagement
  • 9%-15% increase in engaged employees
  • 6- to 16-point decrease in turnover (in low-turnover organizations)
  • 26- to 72-point decrease in turnover (in high-turnover organizations)
  • 22%-59% decrease in safety incidents

So how can your organization approach these impressive numbers? This research, combined with our work with hundreds of organizations, also identified seven best practices for optimizing strengths initiatives. Companies that practiced more of them saw results at the top of the ranges shown above.

Start with leadership. Sometimes a few isolated departments will implement strengths interventions independently, creating a limited impact. But when leaders make these interventions a fundamental strategic priority, that’s when change really happens. Take profitability, for example: We found that the potential for increased profits multiplies when top-level leaders push strengths throughout the entire company.

After a four-way merger, senior leaders at a North American company implemented a “Lead With Your Strengths” program to help employees at all levels understand how to use their strengths to navigate the change, and to foster a unified culture with a shared operating strategy and mutual goals. In the first year alone, the company’s employee engagement levels improved by 26 percentile points in Gallup’s overall organization-level database.

Get managers on board. The best way for employers to maximize workers’ strengths is through their managers. Almost seven in 10 employees who strongly agree that their manager focuses on their strengths or positive characteristics are engaged. When employees strongly disagree with this statement, the percentage of engaged employees plummets to 1%. Manager alignment on a strengths initiative is crucial because managers are ultimately responsible for developing workers based on strengths. This best practice has a profound impact on performance.

Generate awareness and enthusiasm company-wide. When strengths concepts are consistently communicated, employees use their strengths more. A mid-sized financial services company prominently displayed each employee’s top five strengths in their office or cubicle — helping all employees keep one another’s natural talents top of mind. Leaders should also communicate their business strategy in terms of their organization’s competitive strong points – their company’s strengths. Additionally, they need to deliver praise throughout the organization in ways that convey how individuals and teams within have relied on their strengths to be successful. These messages encourage everyone to buy in.

Be mindful of strengths when creating project teams. Not only do leaders need to create ways for all employees to increase their self-awareness, but they should also employ tactics to ensure teams are assembled with each individual’s innate talents in mind. Responsibilities need to be assigned based on what comes most naturally for each team member. For example, strategically partnering two people — whereby both contribute in their area of greatest strength — can make the difference between whether or not teams accomplish overall goals, or even simple objectives.

Focus performance reviews on the recognition and development of employees’ strengths. Even leaders and managers who are motivated to capitalize on their employees’ strengths will find this difficult to do if the company’s performance management philosophy focuses on fixing employees’ weaknesses. A strengths-based approach to performance management is straightforward, appealing and decisive. Managers should conduct performance reviews that encourage and make use of employees’ talents and offer recognition and development aligned with their strengths. Managers should also provide clear performance expectations and help workers set demanding achievable goals. One result of strengths-based performance management is that employees feel their manager knows and respects them, which in turn boosts their performance.

Build a network of strengths experts and advocates. A company’s internal strengths advocates and champions are personnel who play a crucial role in supporting all employees in using what they’re good at to the best of their advantage. These champions help drive the strengths movement at every stage, from initial launch efforts to sustaining momentum down the road. Ultimately, their consistent encouragement can propel the company to world-class performance. One investment management company in the U.K. grew quickly with a network of internal experts who helped employees understand how they could use their strengths more effectively. The result? Despite a competitive and changing market conditions, these individuals were able to adapt to constantly changing environments and develop their skills at the same time.

Tie the organization’s strengths-based culture to its larger brand. A brand that reflects an organization’s strengths-based culture goes a long way for the company. A strengths-based brand attracts the right kind of job seekers – those who are driven to apply and develop their strengths and would be a good fit with the organization’s culture. A strengths-centric brand is also compelling to customers, which can differentiate a company from the competition.

Struggling to live up to its brand promise of exceptional customer service, a large retail company trained its employees to offer shoppers personalized knowledge and advice about purchases, installations, and repairs. When employees were also encouraged to understand and use their strengths, they did an even better job of connecting with customers and providing individualized service. Stores that implemented the new customer strategy and the strengths-based focus grew 66% faster than stores that didn’t use strengths in the initiative.

Now, let’s be honest: employees can’t completely avoid their weaknesses. That just isn’t possible in the real world. But instead of having people waste too much time trying to improve in areas where they’re unlikely to succeed, managers can form strategic partnerships and thoughtful processes that help them work around their weaknesses. Our data suggest that focusing energy on improving in areas that come most naturally to people reaps high returns, as employees and organizations that incorporate strengths as a strategy tend to realize significantly positive business results.

 

HBR: The Best Ways to Hire Salespeople

How are you hiring salespeople? Do you use talent assessments to insure your they are successful? The Northeastern Retail Lumber Association (NRLA) has a great tool to assess your salespeople. Click on this link to get more information. NRLA/LMS Below is a blog from the Harvard Business Review by Frank V. Cespedes and Daniel Weinfurter.

The Best Ways to Hire Salespeople

Many firms talk about talent management, but few deal systematically with a basic fact: average annual turnover in sales is 25 to 30%. This means that the equivalent of the entire sales organization must be hired and trained every four years or so, and that’s expensive.

Consider these stats. Direct replacement costs for a telesales employee can range from $75,000 to $90,000, while other sales positions can cost a company as much as $300,000. Moreover, these figures don’t reflect the lost sales while a replacement is found and trained. In sectors like medical devices, big capital equipment, and many professional services, including these opportunity costs can push turnover cost to $1 million or more per event.

The challenge is compounded by the fact that there is no easily identified resource pool for sales positions. According to Howard Stevens in Achieve Sales Excellence, more than 50% of U.S. college graduates, regardless of their majors, are likely to work in sales. But of the over 4,000 colleges in this country, less than 100 have sales programs or even sales courses. And, even if companies are lucky enough to find qualified grads, the increased data and analytical tasks facing many sales forces mean that productivity ramp-up times have increased. Each hire is now a bigger sunk cost for a longer time.

Bottom line: companies typically spend more on hiring in sales than they do anywhere else in the firm. So how do you improve the returns on this investment? Here are four places to start:

Hire for the task. In business, you hear so many opinions about what makes for a good salesperson. But most are a bland summary of the Boy Scout Handbook, with traits like extroversion, assertiveness, empathy, modesty, and an “achievement orientation.” These platitudes are often reflected in firms’ competency lists and are so broad that, at best, they simply remind us that people tend to do business with people they like (but not always and not as often as many sales trainers assume). At worst, these abstractions are irrelevant to the execution of business strategy, and they make hiring, in sales and other functions, a classic example of the cloning bias: managers use these slogans to hire in their own image.

Selling jobs vary greatly depending on the product or service sold, the customers a salesperson is responsible for, the relative importance of technical knowledge, and the people contacted during sales calls. A review of hundreds of studies about sales productivity finds that “[t]he results of this research have simply failed to identify behavioral predispositions or aptitudes that account for a large amount of variance in performance for salespeople. In addition, the results of this research are quite inconsistent and, in some cases, even contradictory.” Common stereotypes about a “good” salesperson (e.g., pleasing personality, hard-wired for sociability, and so on) obscure the realities you face.

Selling effectiveness is not a generalized trait. It’s a function of the sales tasks, which vary according to the market, your strategy, the stage of the business (i.e., startup or later stage), the customers targeted by your strategy, and buying processes at those customers. This is true even for firms in the same industry. Think about the difference between sales tasks at Nordstrom, where personalized service and advice are integral to strategy execution, and Costco, where low price and product availability make sales tasks less complex and variable.

The first step in smart hiring and productivity is understanding the relevant sales tasks in your market and strategy and then reflecting those tasks in hiring criteria and a disciplined hiring process.

Focus on behaviors. Research based upon thousands of exit interviews shows that a primary cause of poor performance and turnover is poor job fit. People, especially salespeople with a variable pay component, become frustrated when they’re hired for tasks that are a poor fit with their skills and preferences. Conversely, as the saying goes, “You hire your problems.” Zappos CEO Tony Hseih estimates that bad hires have cost his firm $100 million. Famously, Zappos will pay people to leave voluntarily after a few months on the job.

The key is to focus on the behaviors implied by the sales tasks. In many firms, this means upgrading assessment skills. Managers are excessively confident about their ability to evaluate candidates via interviews. In reality, studies indicate a low correlation (generally, less than 25%) between interview predictions and job success, and some indicate that interview processes actually hurt in hiring decisions: the firm would have done better with blind selection procedures! The best results, by far, occur when those making hiring decisions can observe the potential hires’ job behaviors and use a recruitment process based on a combination of factors, as illustrated in the following graphic:

There are many ways to do this, including simulations, interviewing techniques, or (as at Zappos) providing an incentive for self-selection after recent hires experience the required behaviors. Especially in expensive sales-hiring situations, many organizations could emulate the practice used by investment banks and consulting firms when hiring MBAs: the summer job is, in effect, an extended observation by multiple people at the firm of the candidate’s abilities before a full-time offer is extended.

Then, immerse reps in the tasks they will encounter in working with customers. At HubSpot, which provides web-based inbound marketing services to businesses, Mark Roberge has sales hires spend a month in classroom-style training but also doing what their customers do: create a website from scratch and keep that site populated with relevant content. Roberge notes, “they experience the actual pains and successes of our primary customers: professional marketers who need to generate leads online. As a result, our salespeople are able to connect on a far deeper level with our prospects and leads.”

Be clear about what you mean by relevant “experience.” Previous experience is the most common criterion used by sales managers in talent assessment. In one survey, over 50% of respondents cited “selling experience within the industry” as their key selection criterion, and another 33% cited “selling experience in [an] other industry.” Driving this view is a perceived trade-off between hiring for experience and spending money on training. But because selling effectiveness depends upon a company’s sales tasks, “experience” is an inherently multidimensional attribute. It may refer to experience with any (or any combination of) the following:

  • A customer group: e.g., a banker or other financial services recruit hired by a software firm to call on financial firms; or, in health care, firms sell different products, but many sell to hospitals.
  • A technology: an engineer or field-service tech hired to sell a category of equipment.
  • Another part of the organization: a service rep moved to sales because internal cross-functional support is a key sales task and that rep “knows the people and the organization.”
  • A geography or culture: a member of a given nationality or ethnic group who knows, and has credibility within, the norms of the relevant customer’s culture.
  • Selling: an insurance agent or retail associate with experience in another sales context.

The relevance of each type varies with your sales tasks. So consider what type is, and is not (see below), relevant, and require the people doing sales hiring to clarify what they mean by experience.

On-going talent assessments. Markets have no responsibility to be kind to your firm’s strategy and sales approach. It is leadership’s responsibility to adapt to markets and develop the competencies required today, not yesterday.

As organizations confront new buying processes, required competencies are changing. The figure below, based on an extensive database of company sales profiles, indicates the changing nature of sales competencies at many firms. Competencies that, only a decade ago, were considered essential are now lower in priority.

Does this mean that developing leads, qualifying prospects, and adapting to different buyer motivations are no longer important? No. Rather, as one should expect in a competitive activity where success is ultimately measured by relative advantage, the focus of productivity improvement in sales is shifting. Yesterday’s sales strengths have become today’s minimum skill requirements.

This underscores the need for on-going talent assessments to stay in-touch with changing tasks and required behaviors. The good news is that the tools for doing such assessments, based on behavioral research findings, are more available and have more granularity and practicality for sales leaders. Conducting a skills inventory and determining the best fit for your sales tasks need not be the standard mix of folklore, various embedded biases by front-line managers, and the content-free platitudes about “selling” that populate many blogs. And it is increasingly necessary because companies must ultimately be worthy of real talent.

It’s often said that many firms maintain their equipment better than they do their people. If so, you ultimately get what you don’t maintain, especially in sales.

HBR: How to Spot Hidden Opportunities for Sales Growth

Where will the growth come from? Below is a good blog from the Harvard Business Review by Andris A. Zoltners, PK Sinha, and Sally E. Lorimer.

How to Spot Hidden Opportunities for Sales Growth

In the hunt for sales growth, profit growth, or share growth from the sales force, every sales leader, whether new or seasoned, whether from a growth-stage or a mature-stage company, faces the same question. Where will the growth come from?

The best answers are frequently unearthed by looking at differences in performance, sales activity, and market potential across different pieces of the business — certain customer segments, selected products within a broad portfolio, or specific groups of salespeople. Better analytics, as well as improved data storage and organization technologies, are enabling companies to get more creative in the way they analyze data to discover and take advantage of these hidden pockets of growth.

Here are several examples:

Novartis gets more out of its average performers. Working first with the U.S. sales force, global healthcare company Novartis identified a group of salespeople who were outstanding performers and isolated a set of behaviors that differentiated their performance from that of average performers. The company developed a new sales process that was derived from the behaviors of the outstanding performers, and it aligned sales hiring, development, and other programs to support the new process. A key part of the initiative was a selling skills training program called Performance Frontier — The Next Generation in Sales Excellence. In a controlled study, newly trained previously “average” salespeople realized twice the growth rate in sales when compared to a control group of “average” salespeople who were not trained on the newly identified behaviors. Based on this success, Novartis replicated the approach globally.

A manufacturing company accelerates growth among new hires. A manufacturing company tracked performance of salespeople over their first 20 months with the company to understand how quickly new salespeople became effective and why. A key finding was that the quality of the first-line manager (FLM) had a large impact on new salesperson performance. Salespeople reporting to top-performing FLMs performed much better in their first 20 months on the job compared to salespeople working with average-performing FLMs. Top-performing managers did two things that contributed to the performance difference: they spent more time coaching in the field and they arranged for mentorship from experienced team members. Based on these findings, the company established new coaching expectations for FLMs and implemented a tracking system to ensure accountability.

A medical supply company boosts profits by reallocating sales effort across products. A medical supply company had several products in its portfolio. The amount of sales time devoted to each product varied by salesperson. By analyzing differences in the amount of time that salespeople spent by product and the resulting product sales and profits, the company determined a vastly improved way to allocate sales effort across the portfolio. The company aligned the incentive plan to reflect that effort allocation, and educated the sales force about how to spend sales time in order to optimize performance. The result was a measurable increase in sales and profits without any change in sales force headcount.

A business services outsourcing company improves performance in non-metro geographies. A business services outsourcing company compared performance of its 50 least urban (i.e. non-metro) sales territories to that of its 50 most urban territories. Sales per territory averaged $1.2 million in both groups. Yet when compared to urban territories, the non-metro territories had 79% more prospects and 49% more overall market potential. Salespeople in urban territories visited good prospects on average four times a year; but in non-metro territories, that average was just 2.8 visits. Salespeople in non-metro territories were not realizing opportunities because they were stretched beyond their capacity. The company reduced the size of non-metro territories and assigned coverage of many prospects in outlying areas to an inside sales team. This led to increased market share, reduced travel costs, and improved sales force effectiveness outside of metropolitan areas.

A telecom company gets more business from its low performing, high potential customers. A telecom company took advantage of an emerging way to hunt for opportunities by using a collaborative filtering model, similar in concept to algorithms used by companies such as Netflix and Amazon. The company found “data doubles” for low performing, high-potential customers – i.e. other customers who had a similar demographic profile (for example, the same industry and scale), but who were buying much more. The company analyzed the purchase patterns and sales strategies at these more-successful data double accounts and shared the insights gained with the sales force. The information enabled salespeople to improve targeting of the right products for under-performing customer accounts, thus driving stronger uptake of new product lines and dramatically improving the realization of cross-selling and up-selling opportunities.

Together, these examples provide great lessons about how to find sales growth opportunities. It’s not enough to look at aggregate performance across the sales force; aggregation hides insight. Finding opportunities requires observing and understanding differences within specific customer segments, products, or groups of salespeople, including differences in:

  • Performance outcomes. Novartis observed that salespeople with similar market potential had dissimilar sales results, and realized opportunity by understanding what those salespeople did differently. Similarly, the manufacturing company observed performance differences across new hires and the telecom company observed differences across demographically-similar customers.
  • Sales activity. The medical supply company observed that salespeople allocated time differently across products, and realized opportunity by understanding how these differences affected sales.
  • Sales potential. The business service outsourcing company observed differences in territory sales potential and realized opportunity by understanding the impact on sales activity and results.

Companies will always be thinking about their next source of growth. Today’s world of big data enables companies to creatively slice and dice historical sales force data to find new and better sources of insight.

From PERFORMANCE Management to CONTRIBUTION Management: 3 Keys to Making it Work

Blanchard LeaderChat

Performance evaluation formHow is performance management going in your organization? If the emphasis is on assessment, it’s likely that employees and managers alike would rather avoid the whole affair. Who wants to judge—or be judged—and face all of the emotional fallout that comes with it?

Instead, I recently have been working with clients to approach performance management as a way to leverage an employee’s contributions toward organization goals.

The subtle but important distinction between performance management and contribution management can turn a once-negative process into a positive “How can I help you succeed?” approach.

For this kind of partnering to work, managers need to have a few prerequisites in place.  Without them, you will continue to find yourself assessing and evaluating performance instead of working in tandem with direct reports to help them succeed. Think you are ready for this more positive approach?  See how you would score yourself in each of…

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