Nov 252016
 

Forecast accuracy is a touchy subject at most companies and among most sales leaders.

Most sales professionals have the same attitude towards forecasting as a cat does towards a swim in the sea or a diner has towards a rat in his soup. Being held down to a commitment is a part of it. Spending valuable time in a CRM, or would-be, system that outwardly does not provide value to a salesperson’s bottom-line is the major anathema to salespeople. This is difficult argument to overcome because the manner in which CRM/spreadsheets/forecasting tools are (mis)used at companies leaves a lot of room for criticism of the kind. However, when done correctly systematic forecasting is useful not to mention mandatory.

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Photo Credit: Cedric Servay

The stock method of forecasting at companies is:

  • Tally the total amount of forecast dollars available. This is typically done for the Quarter and, by extension, for the year, although a company like Salesforce, for example, forecasts monthly.
  • Review which percentage of forecast dollars in similar previous timeframes ended up as sales wins. For example, if 25% of the forecast amount from previous year’s same quarter ended up being a completed transaction then the same ratio should be applied again. Note the opportunity to explore ways to improve the ratio.
  • A thorough review should be applied on top of the above pattern to special deals in the pipeline. That is, if there is a particularly big deal in the pipeline or a especially large miss is occurring in the forecast timeframe then those have to be distinctly taken into account. These one-time ‘events’ need to be taken into consideration exceptionally as they are exceptional to the pattern. Sales managers need to have a bracket for what makes this deal ‘special’ within the context of the company’s average deal size.
Photo Credit Modestas Urbonas

Photo Credit Modestas Urbonas

Special ‘events’ or deals which need added consideration include:

  • Special deals in the pipeline (as described above)
  • Extraordinary misses in the pipeline (as described above)
  • A special scrutiny of the Top 10 of the biggest deals being forecast
  • A special scrutiny of the deals in pipe for the Top 10 biggest existing customers for the territory
  • A special scrutiny of the deals in pipe for the Top 10 biggest customers by company size for the territory
  • Deals which are considered won already although are not officially booked yet.

 

With the process outlined there are several undertakings that would complement the above and should be mandatory.

  1. Everyone needs to be trained on the system and shown how the calculations are rolled up. One should not assume everyone knows, or can figure out, how to use Excel/Google docs/CRM/methodology of choice. Speaking the same language is a must if the company is to work in lockstep. Define and explain your stages, nomenclature and its prerequisites and, if using a tool like Microsoft Dynamics, Salesforce.com, Sage CRM, Maximizer, etc., use the out-of-the-box templates and definitions as much as possible. Forecasts need to be a lot more science and a lot less art.
  2. Consistency wins. For the sake of credibility and not sending a message of pointlessness stick with the regimen and enforce it for the medium-term. It will become a matter of lost authority if the company asks for a work and time commitment with forecasting and does not follow through. The sales team needs to routinize the updating of the system.
  3. The process and time spent on the above need to be justified and explained. Having a clear sales forecast enables sales managers to report accurately and be accountable to the company, but also it must be a tool in identifying where and whom requires assistance. That is the personal aspect of forecast accuracy and it is very important. Forecasting is ultimately ironic if it does not help sellers sell to buyers and does not identify buying patterns and cycles. Please read that last sentence again. The macro picture is one of a company which knows, understands and addresses its pipeline and can make better decisions towards its own fiscal health, which helps everybody within the ship.
  4. Think about incentives to motivate the sales team to adopt and maintain the routine. How about 5% of the sales team’s variable depending on forecast thoroughness and maintenance?
  5. It also needs mentioning that companies should automate this process as much as possible. Given how it is a mostly inward looking process and is not adding direct value to customers liberating sales teams’ time to spend more time on customers is a bright idea.

 

And here is the most important thought in all of this to emphasize: the above must not come at the expense of team morale and a customer-focused sales process. Salespersons and sales managers cannot get lost focusing on the above at the expense what is more important: working with customers.

Photo Credit: Greg Rakozy

Photo Credit: Greg Rakozy

*Things That Need To Go Away: New Forecasting Process Or Tools That Are Here Today; Gone Tomorrow

Sep 072016
 

You read it correctly. The title is not a typo.

In an article that was sent to my inbox this week the author reports that it is ten times more effective to train your sales managers as opposed to your frontline sales people. The article, which seems to be based on a slightly older talk by Neil Rackham the author of the famous SPIN selling books and program for an organization called the Sales Management Association, also cites a study with the same organization. The study surveyed 161 companies about their sales budget and found that those, which allocated more than 50% of their training budget to sales managers saw the greatest increase in sales and hence the most return on investment. The degree of return increases the more of the training budget is directed at the management team.

This assumes sales managers are concentrating on being teachers and given time and mandate to transfer their knowledge onto the frontline.

Naturally, the study does not suggest or target a complete abandonment of training for salespersons. For instance, sales will still be trained upon hire and be introduced to new products or versions. Importantly, the coaching will be administered by sales management. However, if one chooses to give this premise credence, one could justify its veracity by remembering that the concept of leverage applies here as it does to maintaining a partner or reseller channel for example. After all, companies maintain a reseller channel in order to scale in a way that they could not on their own. A sales manager works with multiple salespersons at the same time. More importantly, and again if you believe this study and I always recommend examining every piece of data meticulously, the proof is in the pudding i.e. the facts speak for themselves.

It would be useful now to get some feedback or thoughts from those affected – sales people and sales managers – and from sales trainers here. The implications are important as the sales budget and companies’ revenue depend on it.

Do you agree that a more effective training budget is better deployed on sales managers than on the frontline? It is certainly novel and food for thought.

manager-training

*Things That Need To Go Away: Obligatory Sales Training With No Follow-up Or Carry-Through

Aug 082016
 

We know that Fear And Pain Avoidance sells.

We also learnt that Insulting And Boring Sell (well… maybe).

What about confusing? Does that sell? According to a study from the University Of Arkansas confusing targets via a “Disrupt-Then-Reframe” technique also sells. The research shows that keeping the technique’s order intact and the components intact are crucial.

The technique suggests confusing or ‘disrupting’ the buyer’s thought process and while they are trying to figure things out make a strong statement, which is to your benefit that claims it is all simple and easy to purchase. This goes against the traditional advice that should a customer be asking questions or not understanding the best way for a seller to go is to clarify things. This technique suggests doing the opposite of allowing the customer to figure things out.

According to the study, the rate of purchase of cards from a seller went from 35% to 65% when the salesperson announced the price of cards as “300 pennies” then went on to explain that it means “$3” before stating that “it’s a bargain.” This study also shows that resistance from those who are on the fence is not overcome through additional incentives, but through the DTR technique which disrupts the resistance when customer has purposefully been distracted.

*Things That Need To Go Away: Clever Sales Techniques That Sell Unneeded Wares

Jul 022016
 

An earlier article addressed job interview questions and what to do from the perspective of an applicant.

Here we consider the interviewer and the hiring company’s perspective. If you have not read it review this article first. It speaks to the imperative of having a process and judging candidates against it.

As mentioned in those posts, asking the right questions during an interview, having a method that is followed and designed with the company’s needs in mind helps make the most fundamental decision to any company’s survival, growth and sustainability a more scientifically pertinent one. There is no more an important decision that a company makes than who to hire.

Unfortunately, too many people short-change or neglect processes and either ‘wing’ the interview, colour it with multiple biases or both. Things are so bad that an article notes how, for certain hiring decisions, machines are better than humans. This speaks to either a lack of process or the introduction – or better put: not suppressing – of personal and institutional biases.

interviewing

 

So what makes hiring more effective, more aligned to goals and speeds up the process for both?

To start, and as part of the suggested systemic interview process, here is a list of questions one should consider asking and situations one wants the applicant to shine in:

Q: Tell me about your previous (‘relevant job description’) success.

A: Does the answer align with what it takes where you work? Are there actual examples culled from the interviewee’s past included in the answer?

Q: Tell me about an occasion of (‘relevant job description’) failure.

A: Does the answer take responsibility, show analysis and a modicum of learning from the candidates past mistakes. Is there an actual situation where the candidate admits to failure and offers a description of the resolution?

Q: Describe a good day.

A: The ideal candidate will give a thoughtful response to how he or she works. There is not a wrong or right answer here. There is, however, a star or two for the candidate who has process, introspection and logic and displays alignment with what you believe leads to success in the job at hand.

Q: Why you?

A: Can the person articulate a convincing reason why he or she has applied and why you should accept the person’s application.

Q: Do you have questions for me?

A: Any good candidate has legitimate and considerate questions. These differ from canned questions that are irrelevant to the particular job or are so clichéd that they obviously stem from a ‘how to interview’ article.

All questions and answers should be situational unless the interviewer specifically is asking for a ’yes’ or ‘no’ answer. Moving away from hypotheticals and into the realm of experience elevates the discussion.

Crucially interviewers must remove their biases, which includes the error of judging a book by the cover or the resume. A person’s appearance, their resume’s content, gender, age and race are not always indicative of their qualification one way or the other. Be aware of one’s personal biases and leash them as best as possible. Doing so would lend itself to the validity of the hiring/interview process. Ask good questions, listen carefully and impartially to assess the responses and you have done yourself, your company and the job seeker a favour.

past-future

 

 

*Things That Need To go Away: Haphazard Interview Questions Made Up On The Fly

Apr 242016
 

How would you answer were one to ask you what is a hallmark of good branding? How would you respond were someone to ask you to cite an example of a successful internal organization?

Customer First Organization

The thought came to me when I realized that during the last fifteen or so years I have read about so many Cisco reorganizations that fact became fiction became legend which, in turn, became one melding into another. This is not meant to be an exercise in being an armchair expert, but the number of public, as well as less publicized, reorgs at the networking giant are widely known. Why mention Cisco? The changes are examples for inward looking organizational structures.
The most recent organizational structure has the company divided into the following divisions:

• Networking
• Security
• IOT & Applications
• Cloud Services & Platforms

One notes that the business is organized according to internal imperatives (development, engineering, marketing and fiefdoms probably) and not according to customer needs. It would indeed be the scarce customer, which would have a group or department dedicated to Cloud Services, which would be distinct and separate from IOT. The same applies to any other combination of Cisco’s four groups.
This is not a knock against Cisco, which certainly makes competitive products, or even an article about the Silicon Valley mainstay. It is about what the successful companies of the future should give thought to.
So, let us take a look at the quintessential success story of the day, namely Apple. What is Apple known for? It certainly is not divisions for computers, phones, mp3 players and operating systems. Apple is known for, wait for it, simplicity, elegance and functionality. These are things customers care for, garners their attention and for which they certainly pay extra. Moreover, all its products are sold under one roof. The Tiffany & Co. company is known for style and luxury. Customers are not expected to deal with a salesperson for earrings, another for gemstones and another for third party products. In fact, the salesperson-slash-concierge personally takes the shopper from corner to corner and ensures a seamless transition. Again, the experience is designed to be oriented towards what the customer would like and enjoy. Contrast that with HP where customers would have had to speak to different persons for printers, laptops, servers and so forth. It is no secret that HP’s star had been diminishing and the company recently threw in the towel by chopping itself into two. Ironically, the move may be a harbinger of focus and good things for the remaining parties, although past experiences do not bode well (does anyone remember Palm and 3Com, to pick a HP-related example)?

Capture

The Brand Pivot To Culture

We are here to hear an argument for creating a uniform culture that is focused on customers, for customers and based on employees winning when customers win. By definition, such a culture negates fiefdoms, internal divisions, competition and trains and rewards employees to deliver on the brand promise, but there is a catch. The brand promise too has to be focused on the customer

• Here is a brand focused on the customer: See Your Business In Our Software – Oracle (where I used to work)
• Here is another: Grow Your Company With Our Solutions – Fictional company
• Here is the reverse and one that is misguided in that it is inwardly focused: The Largest Distributor Of Cola

You see, customers do not care that you are the largest distributor of anything and least of all a certain brand. In contrast, companies do care what you can do for them. It should be about them.

Walking The Talk Of Culture

More critically, and this is actually important, there should be a supporting structure behind the outward and customer-oriented brand. Everything should be designed to support the outwardly focused branding. Aside from deliberate hiring, structure and the functional day-to-day work the company must absolutely insist on employees behaving as such. Companies must align pay, bonus and promotions accordingly. What is the sum total of the design just enumerated? Culture. A culture, which is the enabling structure for a successful company.
This would be a real shock to the system for companies, which foster internal competition, tolerate nepotism and turfs and reward managers who are in it for themselves and their egos.
However, if there is one thing you take away from this article it is this most important concept. The key is that the organizational culture will conform, follow and match what the leadership puts in place for the group. It is not about instilling the culture per se; it is about creating and moderating the enabling structures and guidance that points to the correct orientation. The analogy is that of children and their parents. Parents can say whatever they wish and could instruct their children as much as they want, but unless the walk matches the rhetoric the organization will never follow.

*Things That Need To Go Away: Arrogant Corporate Culture

Mar 132016
 

stay or go

These pages have often featured articles on why employees choose to stay with an employer and why they may choose to depart to other companies.

Here are a few past posts:

  1. Why Employees Stay
  2. Why Half Of Employees Quit
  3. What Matters To Employees

Most managers and employees agree that ‘bad’ bosses are the main reason employees quit. The anecdotal evidence and conventional wisdom only add to my own observation from both sides of the divide.

Here comes the Harvard Business Review with a new study which claims, “employees leave both good and bad bosses at almost comparable rates.” The researchers reached their conclusion by studying and interview 700 employees in the IT sector. The conclusions being counterintuitive it is possible that the study confused its cause and effect. In other words, better employees left and were also the same ones who ‘kept their chin up’ and remained positive in the face of bad bosses or other reasons that motivate employees to decamp. Above average employees are likely to have a passion for and be deserving of more senior jobs and better pay, which are already identified as employee incentives. The key is whether it would be at their present job or elsewhere. This is where companies need to be diligent and retain talent.

The study itself believes that the silver lining in this is that employees leaving good managers become better ambassadors and alumni. Even so, the finding is at odds with what has been this writer’s personal and professional experience. Still, the conflicting findings are not a reason to exclude writing about them or to immediately assign a false value to them.

If – and this should not be construed as a leading sentence – the article is mistaken it could be due to it being one sample studying one industry, although it is doubtful to me personally that employee retention fundamentals are that different from industry to industry.

What do you think?

*Things That Need To Go Away: Companies Without A Growth Plan For Employees Who want It.

Feb 152016
 

Sometimes it is a wonder how easily a percentage of sales management professionals forget or never learnt the fundamentals of sales compensation and motivation.

This is not a knock against the vital and, if the job is being done correctly, difficult sales management position. However, for different reasons sales managers act counterproductively to the desired outcome when it comes time to set goals and define compensation plans.

money bag

 

 

 

 

 

 

 

 

Reasons may include:

  • Sales managers forget what being in a sales (individual contributor) position was like.
  • Sales manager was never in a direct sales position.
  • Sales manager is junior and has not found his or her rationale or voice. This person would go with flow and not make waves.
  • The sales compensation model is of course derived from the company’s strategic plan for the year and is handed down from the office of the Chief Financial Officer and, by extension, board of directors. The sales chain of command was unable to wholly or partly contribute to the puzzle.

chart

 

 

 

 

 

 

Here are examples of what I term counterproductive sales compensation modelling. Before doing that though let us remember that we are not dealing in absolutes. This is not a black and white edict. A compensation plan could very well lie on a spectrum between ‘good’ and the ‘bad.’

Sales professionals are often vocal, and correctly so, with sales compensations when:

  • The numbers are not what the company has in fact budgeted. By the time the sales manager has adds his 5%, the director had added her 10% and the vice-president has tacked on a discretionary 5% the number has ballooned by 20% and is demotivating the sales team. With the team finding the number out of reach sales people react in several ways. They check out when concluding that the target is not realistic. Worse, they become resentful believing the cards are stacked against them. Moreover, when facing a tough market and competitive landscape sales comes to fret a lack of friendly cover. You might be thinking how would the team know (that the numbers have been altered)? It is not the absolute number that poses a challenge, but the delta between numbers and the path to achieving it.
  • Sales numbers are based on one-offs or special circumstances. If a salesperson who happened to walk into a large sale or had a major sale based on a special circumstance that is not repeatable finds the new quota follow the (FY -1 Special Circumstance * FY0 Uplift%) formula he is likely to balk at the number calling it irrational along the way.
  • Similarly, salespersons with spectacular achievements are given congruently higher quota than counterparts based on last year’s success. The message is ‘Thou Shalt Be Punished For Thine Hard Work.’ Looked at conversely weaker salespeople were rewarded.
  • Under adverse circumstances, salespeople hold back – it even has its own term ‘sand bag’ – possible sales from one quarter to the next or worse from fiscal year to the next. Forget helping salespersons over-achieve; under such circumstances sales is actively not achieving.

It is important to not create sales compensation in isolation from the very salespeople who are tasked to execute it. It is also critical that salespersons do not be handed a disincentive and be demotivated by sales management and their compensation plans. Most importantly, managers must examine the compensation plan to eliminate any perceived or actual unfairness. Operating in an environment that is not a level playing field will have the opposite of the intended effect and lead to charges of favouritism or unprofessionalism.

Keep the numbers above board, uniformly applied and view the sales team as mature allies.

*Things That Need To Go Away: not soliciting the sales team’s feedback on the sales compensation model or, worse, soliciting and subsequently ignoring it.

bonus

Oct 242015
 

A 2015 Gallup study called Employees Want A Lot More From Their Managers addresses the fundamental employer and employee question. It confirms what many have either already known or impulsively sensed. Employees do not leave companies. Employees leave people. In other words, for employees, the manager is the company.

employee manager

These pages have addressed the issue of the relationship between employee and employers before. The study adds more evidence to the assertion that employees leave due to bad managers.

What Matters To Employees

What Matters To Employees 2015

Keeping Your Employees Happy

Why Employees Stay

An Interview with Beverly Kaye Of Career Systems International Co-Author of Love ‘Em Or Lose ‘Em: Getting Good People To Stay

The Gallup study of 7,272 adults revealed that “one in two had left their job to get away from their manager to improve their overall life at some point in their career.”

Gallup found that employees want engagement, communication and responsiveness. According to the study, employees unhappy with their managers find annual reviews forced and superficial. Pertinently, employees who are unhappy do not plan or think about the future of the company simply because “they are not even sure what tomorrow will throw at them.”

Managers, are you reading and understanding this?

Are relevant personnel at different companies picking the correct managers and removing mistaken management persons and their respective choices?

Note: this is a US Study.

*Things That Need To Go Away: managers who make life difficult for their employees.

Aug 122015
 

It is not the first time that I write about What Matters To Employees.

See the older iterations here and here.

Here is an update from 2015, which depicts the top 3 priority ‘wants’ of the employees as

1- Pay

2- Location

3- Flexible hours.

TOP 3 Employees

 

 

 

 

To speculate, the ‘top 3’ are likely not as cut and dry as it seems upon first glance. For example, ‘pay’ could mean base pay or variable or signing bonus, etc. ‘Flexible hours’ could mean number of hours worked or vacation days. Moreover, as always, negotiations and wants and needs are not win-lose. For example, a person might mean ‘signing bonus’ and not just ‘salary’ when discussing ‘pay.’ Similarly, an employee might mean ‘office hours’ when discussing ‘flexible hours,’ which may even be in sync with employer needs as they need people in different shifts.

For another perspective, which is different from the results of this survey, read my interview with author Beverly Kaye.

*Things That Need To Go Away: employers pretending the above are not priorities.

 

Jul 132015
 

I wish I could say this graphic is mine. Alas, it is not, but I like it a lot.

54c605b0-71ef-46ff-8f97-b3cd9bd73d04-medium

 

 

 

 

 

 

In fact, since it was sent in, if anyone knows where the source is please tell me for appropriate credit.

The point is what these pages have talked about before herehere and here. Employees are precious and finding good ones is difficult. Keeping good ones is as difficult. More pertinently, however, is the question on how to keep employees.

Many theories float out there, but the notion is that one solution does not fit all. While managers and human resource teams talk and practice team meetings, casual Friday days, commission structures so on and so forth any of these schemes is probably missing the mark the majority of the time.

Employees are humans. Humans are a diverse group. It remains the job of the manager, executive and human resources to understand each individual and work with (motivate) that person (employee) individually.

*Things That Need To Go Away: making employees happy through actions and activities that make managers pleased.