HBR: How to Motivate Frontline Employees

“We’ve written before that why people work determines how well they work — that someone’s motive for doing a task determines their performance. Our work has shown that if a person’s motive is play (for example, excitement from novelty, curiosity, experimentation), purpose (the work matters), and potential (they are improved by the work), then their total motivation and performance increase. But if their motive is emotional pressure (shame, guilt, insecurity), economic pressure (mercenary behavior), or inertia (no motive), then total motivation and performance worsen.” Below is a blog from the Harvard Business Review by Lindsay McGregor and Neel Doshi:

How to Motivate Frontline Employees

One question that has long plagued organizations is how to improve performance among frontline workers, the people who actually drive customer experience. Our work with hundreds of companies offers a clear and simple answer.

To show how it works, we’ll walk you through an example. In 2016 the leadership team of a national retail organization asked us to help boost their frontline performance. They wanted to improve revenue, cost, risk, and customer satisfaction all at the same time. (They reached out to us because we wrote a book describing how these performance outcomes would be improved with an operating model that increases motivation.)

We’ve written before that why people work determines how well they work — that someone’s motive for doing a task determines their performance. Our work has shown that if a person’s motive is play (for example, excitement from novelty, curiosity, experimentation), purpose (the work matters), and potential (they are improved by the work), then their total motivation and performance increase. But if their motive is emotional pressure (shame, guilt, insecurity), economic pressure (mercenary behavior), or inertia (no motive), then total motivation and performance worsen.

The retail organization wanted to see how this applied to its stores. So we ran an experiment: We fully transformed the operating model of four stores (which employed around 60 people) for one year, and then compared their performance with that of the other 750+ U.S. stores.

As we predicted, we saw the performance of our experimental stores increase significantly. Productivity (revenue divided by expense) increased by 20% year over year (far more than the 9% increase in revenue that the control group stores averaged); customer satisfaction increased by 11% (the control group saw it decrease by 4%); and sales increased by 8% (the control group saw only a 2% increase).

We should note that this organization is one of the top performers in its industry, so the baseline performance was already high. But we believe that by taking similar steps, the average organization can improve performance even further.

Focus on Learning, Not Pressure

Prior to this pilot, the operating model of the stores was focused on creating emotional and economic pressure to drive performance. District managers would often hear, “You need to get your team to try harder,” or “This is really not what we would expect from your store,” or “Other stores are doing better.” On occasion, managers would use special rewards or threats to motivate better performance.

This playbook is the norm in most organizations. Based on what we’ve seen, frontline employees are among the lowest in total motivation.

To engage the front line at the retail organization, we implemented a new operating model focused on optimizing play, purpose, and potential while reducing the pressure. This required four major changes:

Reduce the economic and emotional pressure. To ensure this front line could focus on learning, we eliminated high-pressure motivation tactics, including sales commissions, high-pressure conversations, sales-based promotion criteria, and public shaming. We explained to leaders that great leadership isn’t about pressuring people to do their work. Rather, it is about inspiring your people to want to do their work well, so they can perform adaptively.

Incorporate a spirit of play by encouraging experimentation. To drive performance with play instead, we wanted to focus on increasing experimentation. Experimentation fosters curiosity, allows for novelty, and sets the pace of learning — all of which are important components of play.

To encourage experimentation, each store maintained an idea board that tracked the primary challenges the store had to solve, as well as ideas for solutions. For example, in one store, a challenge was how to get more walk-in customers. Colleagues could add any ideas they had, whenever they wanted. The challenges themselves were used to focus ideation on what mattered the most.

Employees were asked to choose an idea on the board and experiment with it. Every person was expected to have at least one experiment that they owned at a given time. They learned about hypotheses and about how to reduce an experiment to its minimum effective dose to get a useful result. Each store also had a weekly 45-minute meeting for teams to review their past performance and experiments, without shame or blame, in the spirit of generating new ideas.

There were rules. Experiments had to be doable on the job using only the budget, tools, and time already allocated to each store. Colleagues learned how to focus on creating low-risk experiments (experiments that were “above the waterline” so as to not sink the ship). Once an experiment ended, lessons were systemically captured and shared. There was no pressure for an experiment to work as long as something was learned. If an experiment didn’t work, the team wouldn’t throw it out, but instead would seek to understand why and launch a different experiment.

Create a sense of purpose around the customer. To build a genuine sense of purpose and meaning, the employees in the experiment stores were taught how to connect every product, process, and policy to the benefit and impact they had on customers. If they couldn’t connect an action to a customer outcome, they were taught that it was safe to ask questions until they understood.

Systematically manage apprenticeship. While experimentation is focused on learning strategic or process improvements, it is equally important to manage the pace of learning through apprenticeship. In a culture of apprenticeship, people receive high levels of on-the-job coaching by others who are higher in skill. And just like the system of experimentation, the system of on-the-job apprenticeship has to be tightly managed.

Here’s what we did: Each store was given a set of 30 frontline skills for employees to learn. This included things such as “generating ideas through sales and service data” and “building advisory relationships with prospective customers.” Everyone was asked to choose the skills that they believed would most improve their performance if they learned them. While leaders would help with this decision, the choice was ultimately up to each individual, with leaders focusing on finding on-the-job moments to learn.

We told leaders to identify and share the strongest skill (the professional “superpower”) of each individual on their team. The point of this was to make it easier for colleagues to seek help with learning skills from their colleagues. For example, one person’s superpower might be “solving complex service problems,” while another’s might be “introducing new products to customers.”

Every week, employees would have a brief development discussion with their leader on how they were progressing on learning their skills. Goals and metrics were transparent to everyone so that nothing was hidden.

As leaders and colleagues focused on skill development, performance problems were no longer met with blame and defensiveness. Instead, if a colleague was struggling to perform, the immediate focus became learning and teaching.

Seeing Performance Results

Only a few weeks after this new model was put into place, the teams’ behaviors started to fundamentally shift.

For example, in one case, one of the most junior members of the store led a successful experiment on how to move customers through the checkout line faster. Another store member conducted an experiment on how to better explain a product’s features to a customer. Another had an experiment on how to improve signage visibility.

At an individual level, colleagues started to open up to their teams on what they wanted to learn. Coaching accelerated. People became far more engaged in their work. At the end of eight months, year-over-year performance at our pilot stores had increased significantly, compared with the control stores. The approach is now being scaled across the organization.

Broadly speaking, in front lines today, productivity growth has stalled, while employees are feeling less engaged and more stressed. Moreover, employee retention on the front line continues to be a problem. Too many organizations are responding to these trends with more pressure and micromanagement, which only worsens the problem and increases risk.

Small increases in productivity and retention can have a significant impact on the bottom line. Our rough calculation suggests that improving retention by one percentage point in a 5,000-person front line results, on average, in $2.5 million in annual benefit. (That number assumes a fully loaded cost of $50,000 per person, and a $50,000 cost to replace a new hire and make up for lost productivity while the new hire is found and trained.)

Now is the time for organizations to invest in workers. By implementing a frontline management system focused on driving performance through total motivation, you can build the ultimate win-win.

The authors give special thanks to the following executives and experts for their advice on this article: Deborah Moe, Mandy Norton, Dan Wilkening, Jamie Warder.

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HBR: A 5-Part Process for Using Technology to Improve Your Talent Management

“There is a lot of fear about the speed and scope of technological change, and it’s perhaps most acutely felt by the middle-management survivors of years of corporate layoffs. Fear does not make people more open to experimenting; rather it leads us to put all our energy and ingenuity toward protecting ourselves — and that is lethal for innovation. That’s why the critical task for leaders in a world in which machines will do more and more of their routine work is to enable a shift, from valuing being right, knowing the answers, or implementing top-down changes, to valuing dissent and debate, asking good questions, and iterating to learn.” Below is a blog from the Harvard Business Review by Herminia Ibarra and Patrick Petitti:

A 5-Part Process for Using Technology to Improve Your Talent Management

At the law firm Allen & Overy, the idea of replacing traditional, annual performance appraisals with a technology-enabled continuous feedback system did not come from human resources. It came from a leader within the practice. Wanting something that encouraged more-frequent conversations between associates and partners, the senior lawyer read about what companies like Adobe were doing, and then asked his firm to help him create a new approach. When the new system, Compass, was rolled out to all 44 offices, the fact that it was born of a problem identified by internal staff helped accelerate the tool’s adoption across the firm.

In an era of transformative cognitive technologies like AI and machine learning, it’s become obvious that people, practices, and systems must become nimbler too. And because organizational change tends to be driven by those who most acutely feel the pain, it’s often line managers who are the strongest champions for “talent tech”: innovations in how firms hire people, staff projects, evaluate performance, and develop talent.

But as we have observed in our research, consulting work, and partnerships with dozens of Fortune 500 companies and top professional services firms, the transition to new and different ways of managing talent is often filled with challenges and unexpected hurdles. Gaining the most from talent tech, we find, depends on the adopting firm’s ability to confront, and ultimately reinvent, an often outdated system of interlocking processes, behaviors and mindsets. Much like putting a new sofa in the living room makes the rest of the décor look outdated, experimenting with new talent technologies creates an urgency for change in the rest of the organization’s practices.

While the jury is still out on the long-term impact of many of the talent tech experiments we have witnessed, we have observed five core lessons from those firms that seem to be positioning themselves most effectively to reap their benefits:

  1. Talent tech adoption must be driven by business leaders, not the C-suite or corporate functions.
  2. HR must be a partner and enabler — but not the owner.
  3. Fast-iteration methodologies are a prerequisite, because talent tech has to be tailored to specific business needs and company context and culture.
  4. Working with new technologies in new and nimbler ways creates the need for additional innovation in talent practices.
  5. The job of leaders shifts from mandating change to fostering a culture of learning and growth.

Let’s look at these one by one.

  1. Talent tech adoption must be owned and driven by business leaders.

Many business leaders we have spoken with have stressed: It’s not about the technology, it’s about solving a problem. It’s no surprise then, as we have observed, that talent tech projects have a greater likelihood of succeeding and scaling when they are driven by the business line — and not by top management or functional heads in HR or IT. Because operational managers are closer to the action, they have better insights into specific business challenges and customer pain points that can be addressed by new technologies.

As a VP charged with talent tech innovation at a large consumer products company told us: “We started our digital transformation top-down, creating a sense of urgency and cascading it down. Now it’s much more bottom-up because you have to experiment, you have to do things that are relevant in the field. The urgency has to come from inside the individual instead of top management.” The company organized a series of road shows that exposed high-potential managers to new developments in AI and enabled them to propose and run with projects of their own.

Putting responsibility for innovation in the hands of those who are closest to customers, and reducing layers of control and approval, increases the likelihood that the talent technologies will be fit for purpose. But for a generation of senior managers and functional heads raised on a steady diet of “visionary leadership,” this more adaptive approach does not always come naturally.

  1. HR must be a partner and enabler — but not the owner.

Not only are line managers closely connected to business imperatives, but they are also eager to move fast in technology adoption. They want to seize on the promise of AI, machine learning, and people analytics to improve business results and enhance their career prospects. But their priorities can conflict with other parts of the business.

At one of the companies we worked with, a young, ambitious manager experimented successfully with an on-demand talent platform for staffing employees on projects. But the experiment raised questions, for example, about what latitude bosses had in deciding who’d be allowed to take on extra projects and about whether performance on these extra projects could or should count toward an employee’s annual appraisal and compensation. HR was not involved early enough, was more attuned to the risks than the opportunities, and opposed scaling the project further. Only after a lot of stakeholder management and leadership intervention did the pilot get back on track.

The ramifications of reimagining work are far-reaching, necessitating talent strategies built on the ability to access the right people and skills at the right time and then put them to work in flexible ways for which they will be coached and rewarded. But if middle managers wind up caught in bureaucratic procedures and rule-enforcement mindsets, implementations will falter. That’s why getting buy-in from HR early in the process is so important — and necessary for scaling up when pilots yield promising results.

  1. Knowing how to use lean, self-managing team methodologies is a prerequisite.

Because AI-powered tools like on-demand talent platforms and project staffing algorithms are not simply “plug and play,” it can be helpful to use methods such as rapid prototyping, iterative feedback, customer-focused multidisciplinary teams, and task-centered “sprints” — the hallmarks of agile methodologies — to determine their usefulness.

For example, one large industrial company needed a better way to get people on cross-functional projects. Information about people’s skills and capabilities was dispersed across siloed business lines. Rather than attempting to build out a comprehensive system to identify and match employees across all the projects (and the silos), the company piloted the idea with only a few projects and a carefully selected pool of employees. Starting small allowed extremely fast learning and iteration, broader scaling, and more-complex uses of the system.

We have worked with a range of companies that are experimenting with technology platforms that catalogue projects that need doing, match project needs to skill supply, and then source appropriate talent. In each case, significant modifications were needed to adjust to specific requirements. And in most cases the data necessary to run the new systems existed in different formats residing in silos. Companies that lacked experience with lean methodologies had to be trained to operate as agile teams in order to define a specific use case for the technology. This learning curve is often the culprit behind implementation processes that take significantly longer than managers expect.

  1. Talent tech raises urgency for further talent innovation.

Much has been made of the scarcity of AI engineers, along with the fact that the precious few are quickly snapped up at huge salaries by the usual suspects — Amazon, Apple, Google, and Facebook. Beyond the hype, many firms are finding that they cannot hire the talent they need (because the top experts prefer to be free agents or already work for competitors) and that the skills and capacities they need evolve rapidly or are best sourced externally. These trends are fueling a strategic shift from acquiring talent to accessing talent on an as-needed contract basis; yet the cultural hurdles to staffing externally can be as, if not more, challenging than the technological ones.

One organization we worked with did not have a good mechanism in place for prioritizing the work requested of its shared internal consulting services. Its highly skilled consultants were responding on a first-come, first-served basis and fielding more demands than they could handle. Often they were also the wrong demands. When the team didn’t have the right people on the team for the work, they’d either do their best to complete it themselves or abandon it altogether. An analysis revealed that a good portion of the work could be better done externally by highly skilled contractors, and in fact the team could dramatically increase its ability to provide value across the organization if it could access a specific set of external expertise. But implementing the change was a challenge because the unit’s internal clients felt “safer” working with internal employees.

Once one part of the people system changes significantly, the pressure is on to change related processes. Companies that have shifted to more-agile ways of working have also found that they can no longer evaluate people once or twice a year on their ability to hit individual targets; they now need to look at how people perform as team members, on an ongoing basis. All of this is driving a shift from annual performance assessments to systems that provide feedback and coaching on a continuous basis, as firms ranging from Allen & Overy to Microsoft have found.

  1. Leaders must foster a culture of learning.

One CTO we spoke to tells a story about an AI project that “hit the wall” despite a sequence of green lights. “It was over-administered,” she explained. “We had specified detail into 2019.” As reality on the ground began to diverge from the plan, the people in charge of executing the plans failed to speak up and the project derailed. Without people who feel an “obligation to dissent,” she concluded, it’s hard to innovate.

Across industries and sectors, practitioners and academics seem to agree on one thing: Successfully piloting new technologies requires shifting from a traditional plan-and-implement approach to change to an experiment-and-learn approach. But experiment-and-learn approaches are by definition rife with opportunities for failure, embarrassment, and turf wars. Without parallel work by senior management to shift corporate cultures toward a learning mindset, change will inch along slowly if at all.

When Microsoft CEO Satya Nadella took charge, for example, he saw that fear — and the corporate politics that resulted from it — was the biggest barrier to capturing leadership in cloud computing and mobility solutions. A convert to Carol Dweck’s idea of a growth mindset — the belief that talent is malleable and expandable with effort, practice, and input from others — he prioritized a shift from a “know it all” to a “learn it all” culture as a means to achieving business goals. Today, not only does Microsoft rank among the top firms in cloud computing, but the company is also “cool” again in the minds of the top engineering talent it needs to compete.

There is a lot of fear about the speed and scope of technological change, and it’s perhaps most acutely felt by the middle-management survivors of years of corporate layoffs. Fear does not make people more open to experimenting; rather it leads us to put all our energy and ingenuity toward protecting ourselves — and that is lethal for innovation. That’s why the critical task for leaders in a world in which machines will do more and more of their routine work is to enable a shift, from valuing being right, knowing the answers, or implementing top-down changes, to valuing dissent and debate, asking good questions, and iterating to learn.

 

HBR: How to Lose Your Best Employees

“When we are learning, we experience higher levels of brain activity and many feel-good brain chemicals are produced. Managers would do well to remember that.” What are you doing to keep your employees challenged at work? Below is a blog from the Harvard Business Review by Whitney Johnson:

How to Lose Your Best Employees

You want to be a great boss. You want your company to be a great place to work. But right now, at this very moment, one of your key employees might be about to walk out the door.

She has consistently brought her best game to work and has grown into a huge asset. But her learning has peaked, her growth has stalled, and she needs a new challenge to reinvigorate her.

As her boss, you don’t want anything to change. After all, she’s super-productive, her work is flawless, and she always delivers on time. You want to keep her right where she is.

That’s a great way to lose her forever.

This was my situation more than a decade ago. After eight years as an award-winning stock analyst at Merrill Lynch, I needed a new challenge. I’ve always liked mentoring and coaching people, so I approached a senior executive about moving to a management track. Rather than offering his support, he dismissed and discouraged me. His attitude was, We like you right where you are. I left within the year.

This kind of scenario plays out in companies every day. And the cost is enormous in terms of both time and money. But if I had stayed and disengaged, the cost may have been even higher. When people can no longer grow in their jobs, they mail it in — leading to huge gaps in productivity. According to Gallup, a lack of employee engagement “implies a stunning amount of wasted potential, given that business units in the top quartile of Gallup’s global employee engagement database are 17% more productive and 21% more profitable than those in the bottom quartile.”

And yet engagement is only symptomatic. When your employees (and maybe even you, as their manager) aren’t allowed to grow, they begin to feel that they don’t matter. They feel like a cog in a wheel, easily swapped out. If you aren’t invested in them, they won’t be invested in you, and even if they don’t walk out the door, they will mentally check out.

How do you overcome this conundrum? It starts with recognizing that every person in your company, including you, is on a learning curve. That learning curve means that every role has a shelf life. You start a new position at the low end of the learning curve, with challenges to overcome in the early days. Moving up the steep slope of growth, you acquire competence and confidence, continuing into a place of high contribution and eventually mastery at the top of the curve.

But what comes next as the potential for growth peters out? The learning curve flattens, a plateau is reached; a precipice of disengagement and declining performance is on the near horizon. I’d estimate that four years is about the maximum learning curve for most people in most positions; if, after that, you’re still doing the exact same thing, you’re probably starting to feel a little flat.

Take my own career: I moved to New York City with a freshly minted university degree in music. I was a pianist who especially loved jazz. But I was quickly dazzled by Wall Street which, in the late 1980s, was the place to work. I secured a position as a secretary in a financial firm and started night school to learn about investing.

A few years later, my boss helped me make the leap from support staff to investment banker. It was an unlikely, thrilling new opportunity that required his sponsorship and support. After a few years, I jumped again to become a stock analyst, and I scaled that curve to achieve an Institutional Investor ranking for several successive years.

When I began, I was excited to be a secretary on Wall Street. I was also excited to become an investment banker. And I loved being a stock analyst. Though I started in each of these positions at the low end of their respective learning curves, I was able to progress and achieve mastery in all of them.

Eventually, I became a little bored with each job and started looking around for a new challenge to jump to. Most of us follow similar patterns — our brains want to be learning, and they give us feel-good feedback when we are. When we aren’t, we don’t feel so good. The human brain is designed to learn, not just during our childhood school years but throughout our life spans. When we are learning, we experience higher levels of brain activity and many feel-good brain chemicals are produced. Managers would do well to remember that.

Because every organization is a collection of people on different learning curves. You build an A team by optimizing these individual curves with a mix of people: 15% of them at the low end of the curve, just starting to learn new skills; 70% in the sweet spot of engagement; and 15% at the high end of mastery. As you manage employees all along the learning curve, requiring them to jump to a new curve when they reach the top, you will have a company full of people who are engaged.

You and every person on your team is a learning machine. You want the challenge of not knowing how to do something, learning how to do it, mastering it, and then learning something new. Instead of letting the engines of your employees sit idle, crank them: Learn, leap, and repeat.

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.

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.