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Corporate Personalities and Channels of Communication

Waaaaaaaay back, like 200 years ago, there were only a couple of channels of communication: either face-to-face, or by letter. So if you ran or worked for a company, a boss communicated to you or a supervisor (the idea of “manager” would come later in the 20th century), and/or you had scriveners who copied important documents and transcribed important numbers and events. All manual. Tedious by our standards today due to it’s limited replication abilities and smaller audience reach. There was no meeting recording, and the pace was accordingly slow.

Add 50 years, and the new tools in the arsenal included a typewriter, carbon paper, telegraph, and possibly a telephone.

200 years ago…

By 1875, you could type a document—type copies of it—and telegraph information to someone across the country. You could actually have a sales force which didn’t reside at your corporate HQ. And by 1877, there were 49,000 phones in the US, and nearly 600,000 phones by 1900. If you’ve ever seen adoption curves for technology, its adoption only gets faster and faster. But for phones, when you think about the infrastructure which had to be installed to have a phone which actually connected to someone else, I believe its adoption rate tops all others, although the graphs don’t support it.

You may be asking, “Why all this history? What are you getting at?”

The point is, many things we take for granted, things like phones which we have incorporated into our lives and have no idea what it is or was like to not have a phone, have shaped our communications and our expectations for our communication. My children have never known what it’s like to not have wireless connectivity. Even worse, they have no idea the difference between cellular or wireless and simply expect to always be connected. The youngest is the worst about this.

For Instance, if you grew up in the 1970s, you probably had one phone in the house for the whole family. This meant you negotiated and shared—working with the members of your family to determine use. By the 2000s, a single landline is archaic and everyone has an individual number. Anymore, worrying about sharing the single landline phone never crosses anyone’s mind. (Recently, my son was on our home phone line and the person on the other end asked if he was on a landline—he had to pause to think about it.) With the prevalence of texting, now families communicate from room to room—no longer is it necessary to yell up the stairs, “Time for dinner!” For that matter, families which dine together are decreasing in number like landlines.

In the end, communication styles have changed. And companies have adopted particular communication paths based upon culture, legacy or mandate. But usually, it is a result of culture.

But this is where I ask you to pay attention as this is important: That culture determines how people inside and outside the company communicate. If a culture is a voicemail culture, then leaving voicemail which is succinct, on-topic and information rich will be much more important than “look at me” voicemail.

As an example, my wife worked for a law firm which segmented how it communicated by the virtue of the information being transmitted. If it was case related, it was in an e-mail. If it was business or day-to-day process related, it was voicemail. For example, if someone had research completed which was pertinent to a case, they put it in an e-mail. If an associate had an update as to where they stood on that research, they put it in a voicemail. (“Still going through documents on the Rictus case. Not smiling—could be several hours more.”)

What they frowned upon was cluttering the voicemail box with updates which didn’t add either. One intern loved to leave a voicemail to her managing partner showing how long and hard she worked: “Hi Jerry, it’s Erica. It’s 2:30AM and I’m just leaving for home. I’ll be back tomorrow morning to continue my 15 plus hours efforts to tease details from the Brownsnoser case.”

Jerry, not surprisingly, didn’t find these voicemails informative, but more annoying. There was no information pertinent to the case, and a simple knock on Jerry’s door, stopping by his office the next day would have sufficed. In the end, Erica brought more negative than positive attention on herself by leaving these pigeon droppings.

A large technology company used e-mail as it’s primary communication path at a time when e-mail was not really an adopted method across their industry. But here is where abuse crept in as well—people would record voicemails and send them via e-mail. And soon, the recipient’s inbox was full because of voicemail—not e-mail!

And, when communicating internally or externally, think about the what of your message. Data intensive? Use text. Emotionally sensitive? Use voice. And if the culture of the company with whom you’re communicating leans in the opposite direction of what you are sending, then leave them a little memory jogger in their preferred medium. Long, emotional voicemail? Send an e-mail pointing the recipient in the direction of the voicemail (and saying no more than that). Important, data-filled e-mail? Leave a voicemail (or a text) which tells them to make sure they read your tome.

Last, make sure you use the different channels as they are intended. I (reluctantly) mentioned texting in the previous paragraph. Sometimes a text is just the ticket, but remember, just like e-mail, it is asynchronous communication (NOT real-time) and two, it is called Short Message Service (SMS) for a reason. The first rule in texting is don’t expect a response. Rule two is keep it short. If the texts get too long, switch to an appropriate mode of communication. Rule three, be aware the recipient’s physical location is unknown to you, so be sensitive to where your fellow texter could be. If you are blowing up their phone while they (or you) are in an important meeting, then back off. If the recipient is responding during same said meeting then shame on them.

So in the vein of Smart Sales Operations, why emphasize all these points? Because efficient communication is smart communication. Getting your message across is difficult in a world which has increasing amounts of static. Be clear. Be concise. Be EFFICIENT.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

Efficient E-mail Makes Everyone Efficient

If you are like me, you have a personal e-mail account in addition to your work e-mail. You may even have other e-mail addresses adding to those basic two you have to manage. When it comes to reading e-mail, keeping track of numerous different addresses has a fundamental problem: volume.

There has been a lot written about e-mail: etiquette, management, sending, receiving and bcc’ing. I’m not sayin’ what I’m sayin’ is original, but efficient e-mail came up in a conversation the other day, and I knew I had to tell my perspective…

First, the background. As I’ve mentioned before, I surprisingly have a lot of connections to hockey. I play hockey, my wife plays hockey, my son plays hockey and my daughter plays hockey. Only one child missed the hockey train, but since she is already out of the house and out of college, she is an outlier and gets removed from the data set. Because of all this hockey, I receive a lot of personal e-mail around scheduling. Scheduling for practices, workouts, games, meetings, films, etc. My youngest child, my daughter, happens to play for three different organizations, which means e-mail times three. In addition, one of the organizations she plays for has a house team and select team–the select team pulls players from the various house teams to form the select team. (Bear with me, I’m getting to my point). The coach of the select team has done us all a solid by coaching (if you have never coached hockey, it might just be the longest sport season of all the sports, starting in September and going until March–some claim longer than that).

The coach, while excellent and attentive, has one major flaw–he can’t write a succinct e-mail to save his life. Not only that, but within each tomes he types is vast and varied amounts of pertinent information. I mean A LOT of info. For instance, we had a tournament this past weekend in Pittsburgh. In one e-mail, the select coach listed 1) the dates 2) the times 3) the hotel information 4) the opposing team info 5) the organizing body info and more. It was three pages. It was dense. There were no bullet points. And, it was unusable from a smart phone because I forgot what I was reading by the time I scrolled down to the bottom with innumerable thumb swipes.

So I suggested to him, based upon my experience in business and coaching soccer, to get EFFICIENT.

What do I mean by efficient? Well…in marketing, they talk about “open rates” and “above the fold“. The first means did the recipient actually open my e-mail, and second, was the call to action within the first reading pane before the reader had to scroll down.

So there are two examples I’m going to use, and one shows this in action, and the other shows the chaos of reaction.

My sport growing up and through college was soccer. And then coaching soccer. And then coaching my children’s soccer teams. And in coaching soccer and communicating, I learned some lessons. In the beginning of the season, the first e-mail I sent was one big e-mail with all the pertinent info about where to find stuff, contact me, my assistant coach, schedules, venues, etc. And after that initial kitchen sink e-mail, then each week I sent basically one e-mail, and did it in a very specific way.

First, the subject line always spelled out exactly what this was about, e.g. “2016 Fall Soccer – Seniors – …” and I would fill in what it was concerned with, like “practice cancelled” or “game delayed”.

Why? Because it was incredibly easy to search for my e-mails when the Subject Line started this way, and the recipient could look at their smartphone and see in the subject line what the message was and to what it pertained.

Second, in the body of the message, the call to action came first, “Practice has moved to the adjacent field.”

Third came the detail. “Parents, we have been informed our senior boys are scaring the bejeezus out of the younger children as they leave the field so we are moving practice to an adjacent field.” It looked like this:

To: tom@soccercoach.com
From: tom@soccercoach.com
Bcc: mom@soccermom.org
Subject: 2016 Fall Soccer – Seniors – Practice has moved to the adjacent field

Please start practice on Filbus field starting this afternoon.

Parents, we have been informed that our senior boys are scaring the bejeezus out of the younger children as they leave the field so we are moving practice to an adjacent field on Filbus Fields.

Thanks,
Tom
tom@soccercoach.com
(555) 555-5555

The most important takeaway from this method is each e-mail addresses one (1) issue! Even if the parent or player doesn’t open the e-mail, they know what it’s about. And, it isn’t some directive without explanation, but I don’t give the explanation unless the reader continues reading.

Your mileage may vary, but I saw my rate of parent and player replies (which meant I would have to reply back) drop significantly once I implemented this. Communicating directives efficiently gave more time back to me.

Next, the chaotic business example, one around internal communication.

In most organizations, e-mails flow back-and-forth like a conversation. And when someone says, “Did you read my e-mail?” it comes off as a challenge, because of course you read their e-mail (right?). Then the conversation spirals downward to talk about time-stamps and swamped inboxes. So I’ll give you an example of something which happened to me where the use of efficiency would have eliminated a 100+ e-mail thread and two hour-long conference calls.

In a former company of mine, we were working to sell a training package to a company. I had outlined this to the training manager in an e-mail and he replied back, but included in the reply commentary and pricing on another deal we were working on. So, true to my beliefs, I created a separate e-mail thread addressing this new information and went back to handling the information I had requested for the initial client in a different thread.

Then, my colleague proceeded to reply to both e-mails the same, because he was trying to join the thread back together. I replied to him with separate e-mails because they were separate issues with separate customers. He called me on the phone to rant about my ineptness. I politely explained how he was talking about two different issues and they needed to be kept separate. He organized a call with my manager to complain and on the call my manager said, “You had a call to waste my time about e-mail?”

The result of this was a very soft and perfunctory reprimand from my manager (“Make sure Bob knows in advance before you split the e-mail into separate threads.”) and my realization how I needed to deal with Bob in the future–call him. It was more efficient than e-mailing him and convoluting the topic I wanted to cover and it was the best channel of communication to work with him. (A topic for another time.)

In summary, in business communications–not marketing–keeping e-mail threads simple and specific creates efficient conversations.

Oh, and the good news? My daughter’s hockey coach and took my advice. Now if he could just cut it back from two paragraphs to one.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

What Day Is Laundry Day?

When you think about laundry, what comes to mind? Lost socks? The folding? Or maybe you simply don’t like to do laundry (like the 100+ year-old woman I saw interviewed on Johnny Carson many, many years ago. “What don’t you miss?” asked Carson. “Warshing Dey!” She exclaimed) . A lot of what I write about centers on lean thinking the application to Smart Sales Operations. But I’m not just about smart sales operations. As I’ve stated elsewhere, I think about efficiencies and how to get more efficient all the time—in every facet of my life.

And one evening when I found myself conversing about doing laundry with a fellow hockey player, I realized my obsession with cranking through laundry wasn’t only my secret obsession. He and I were both about getting laundry clean and put away as quickly and as efficiently as possible. It was our children and spouses who created our OCD, but the growth in our compulsion was through experience: things like finding mildewed wet loads left in the washer and our bedrooms and family members’ various pieces of furniture looking as if hit by a yard sale. Clothes laid on furniture instead of put away in closets or drawers–basically clean clothes left out for cats to sleep on and children to pile up dirty over clean. So, he and I discussed how we crank it out, getting from dirty to clean to put away in one fluid and very compressed event.

How does clean, folded laundry relate to Smart Sales Operations? First, let me clarify if any have concern about me doing the laundry versus my wife please understand that I have no issue. My dad and his generation might, but me? I just want it done. And since I work out of my house, I do most of the laundry. I ended up taking it over completely when I started working out of my home, and what clinched it was one of my past companies had a series of calls every Monday morning which were interminable. Since I was an hour ahead of the main office, by the time our calls ended it was usually noon my time.

To make better use of that time, I started throwing in laundry before the first Monday call and transfer loads in between the queue of calls, pulling clothing from the dryer so things wouldn’t wrinkle, and then when all the calls and laundry were finished, take it upstairs for eventual folding.

Now, don’t judge my parenting skills, but the intent was then to have my children (and sometimes my wife) fold their clothes. Or, what usually would happen is the clothes would sit in a chair in the bedroom and I would end up folding them— on the following Sunday.

So what really happened is clean laundry sat for week in the chairdrobe. Sometimes it would sit for more than a week depending on my travel schedule and what I had going on that weekend. There might be two weeks of clean clothing in my bedroom chair waiting for folding. My children would ask where particular items were and I would palm my forehead wondering if they understood where the clean clothes were and what they were capable of–that is, folding and putting laundry away as well me.

And then one day, many years after I had been away from the company where I formed this habit, I realized doing laundry on Monday wasn’t achieving what I really wanted, which was to get everything completed in one day. My habit created a situation that hung over my head. In the vein of David Allen, think Getting Things Done, I wasn’t getting things done or prioritizing so I could get things done.

The epiphany came one day when I had to do the laundry on a Friday. Per my usual, I finished everything and had it upstairs in a day, and then realized when folding it on Sunday I only had two days between getting the dirty laundry clean and getting the clean laundry put away.

Eureka!

If I were in manufacturing, this would be akin to combining assembly stations or cutting out a step where the next pick in line had to wait to add value to the product.

Do you see why this relates? Why I got excited enough about this to write about it? By rethinking what I was trying to achieve (clean, folded laundry) I had to change how I approached my timeline to get it done. I went from a process which could take up to seven days to one that takes only up to three.

Part of the struggle evangelizing Smart Sales Operations is there are two jobs to do: first is to educate what is “Smart Sales Operations”. Second is to point to the company’s sales operations and get them to see it could be better. The best possible outcome is they “get it” and engage to correct. Sadly, what I’ve come to learn is most companies and most people don’t realize they have a problem in their sales operations. Like my laundry, they just don’t see that gap of four days, because things work well enough that it isn’t apparent to them—so they don’t acknowledge the pain it is causing because the expected outcome has never been measured. Because no data has been applied to their process, the end users downstream live with it because it is all they have. It is very much like cutting the end off the ham.

Think about your company processes. Where are there forms, reports or reporting which are redundant or extraneous? Or where do expectations march along without too much question because management isn’t affected by them? Where are the places in your sell chain where you are unaware of the friction it creates for their sales reps? (This is a “known unknown” and will be addressed later.)

And, we all have the same thing going on in our personal lives. We have habits, and we have training, and we have our way of executing—it takes a lot for us to raise up our heads and look around with fresh eyes. We tend to do what we know, and judge from a our perspective

We are always capable of learning new things—and your company is desperate for change, believe it or not.

So, what are you going to look at anew? Better yet, when? The sooner the better.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

Are You Coin Operated?

To date, I’ve heard so many people in sales use the phrase, “I’m coin-operated!” And, they are implying they are merely driven by cash–the cash which is provided by selling more. This saying has been bandied about so much that I don’t think those who say it really understand what they’re saying. As if cash were king for why they do what they do.

But, if you really sit back and think about it, the saying actually is the antithesis of what it is purporting.

“Coin-operated” really means if you put money in, you get something out. It really would be better aligned with doing some sort of piece-work labor, like sewing clothes or making shoes. Coin in, shoe out. Or making one of those children’s toy horses at the store front run–put coin in, horse goes, “Nay!”

In tech sales, that piece-work model really doesn’t make any money. If it was coin-operated, then I would be making more and more as I put more effort in. Sell more widgets, make more money. But compensation plans are still being crafted like they were at the turn of the century, last century, that is circa 1900. If I set your quota at $1MM, then when you achieve that number you should make whatever was agreed to. But if I achieve $1MM, and then you raise it to $1.2MM, I’m not coin-operated, I’m effort operated. I’m the reverse of the phrase.

In the end, it has been shown that incentive based compensation has limitations. If you want your reps to work for you instead of against your plan, then you need to compensate them in a way which recognizes what goes into the sale.

Strive to achieve that end. Don’t work at building hurdles and obstacles into a plan to make your reps work harder. If you build in disincentives, then you aren’t working at getting more business, you are working at getting rid of your rep.

In the end, the goal should be to make the sales rep successful. Moving target quotas, territories or account lists doesn’t enable that.

Think carefully when crafting a compensation plan about what behaviors you are trying to reward. Is it new logos? or renewals? or account penetration?

Many years ago I listened to a conversation between Jay Abraham and Tony Robbins. I remember my brain lighting up listening to Jay speak because he confirmed everything I had already deduced to be true in the connection between sales and marketing.

The specific tie to this post though, was in regard to customer acquisition versus customer retention. Currently, when I receive notices from recruiters, all of them say “looking for a HUNTER” (caps optional, depending on the recruiter). Now, when it is a new company with a new product which is reaching out into a new territory, the idea of a hunter sounds like just the ticket. Get some guy to go and bust down doors and beat the crap out of a customer so they buy.

Let me throw out an idea. Hire an established farmer.

What? Blasphemy! (That’s you talking, not me.)

Why would I propose that? Because if you hire a farmer who has a sizeable network of customers he’s dealt with over the years, then he has a much better shot of getting a meeting with a potential buyer than someone coming into the territory unknown.

It’s just a thought, but it might prove better than hiring a rep knowing that he is going to put A LOT of effort into finding prospects, only to probably not meet his quota. He’s going to put in a lot of coins before he gets operated.

So look at how you are approaching your market and how your rep is going to make money.

Because, if your rep is making money, then the company is making money.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

Transparency

Physics question: What is the difference between transparent and translucent? Opaque and clear? Iridescent or luminescent?

We use descriptive “clarity” words in our everyday speech. But in business, if you talk about “clarity”, i.e. being transparent, there is a difference. It is supposed to mean nothing is hidden: all the financials and agendas are open and known, and the path which has been chartered by executive leadership is easily accessed, followed and understandable by all.

Now, let’s stop laughing and dry the tears from our eyes as we discuss what really happens in business–obfuscation, misdirection, subterfuge, and outright lying. I’ve held off posting for a couple of weeks as I was observing some first hand obfuscation at a client and dealing with it. Management, in this scenario, was opaque and misdirecting with its policies and procedures. Personal agendas seem to trump corporate agendas, and covert strategies appear in hindsight to have been executed to maximize some individual’s leverage and pay.

I know this sounds jaded, but sadly, many times it is true.

First, a couple of stories around the good and the bad.

The good first. My friend owned a business which started off from nothing. Three partners came together and started a recruiting firm. They did what most startup business owners do, they hired sales talent and paid with highly leveraged compensation plans, and as the reps hustled and the company grew, the reps watched their commissions come in. The commission plan worked for the first few years, but as the company’s original business shifted and it became apparent the original commission plan didn’t fit the new path, the partners knew they had to make a change.

My friend came to me for advice. He explained where they started, where they were going and what the company needed to do to remain profitable. (In a nutshell, they were a permanent placement firm which had shifted to predominately staff augmentation in a niche market.) He did some mild railing against some of the biggest abusers of the comp plan and told me about the partner’s plan to roll out new, individualized comp plans to each rep. Their focus was on crafting plans for the senior reps which didn’t completely destroy their current commissions and shaft the newer reps with a greatly reduced commission structure–a kind of “robbing Peter to pay Paul” scenario.

When I asked how they arrived at that, the essential answer was they formulated their plan in a vacuum. The partners had met with each other and hadn’t asked for any input from their sales reps, nor were they planning on discussing the roll out with them.

What I recommended was transparency. First every rep got the same plan. Second, was a disclosure of the company numbers on sales, revenues and margins. And third, an explanation to all the reps why the company had to change the plan.

My emphasis, more than anything, was to use data to justify the “why”. If three years ago permanent placements made 90% of the revenues and that commission structure made sense but now only 10% of the revenues were placements, then that is a change which has to be addressed. But to simply move the bar on the reps without explanation creates distrust and paranoia. “What are they going to take away from me next?” I told him the reps would say. And things like, “I heard the company is in trouble.”

Surprisingly, (but happily for me) he took my advice. They gathered all the recruiters together and showed them the numbers, the trends and the future path of the company. They presented a new compensation plan which was fair, focused on the new direction, and still allowed for equal income as before by incenting the desired sales path. And they promised a transition period during implementation. After three months, only one of the senior reps had left. And the company transitioned to their new model. In the end, they survived the transition to go onto their next phase which catapulted them from a boutique to a medium-sized business.

The bad story. I’m changing some of the details around this so as not to identify any business in particular.

A company I consulted for had been holding more and more closed door meetings. The president and the VP of Sales, or the Controller, or the VP of Marketing. Individual meetings, sometimes with some different combinations of the aforementioned people, but more and more meetings. Prior to this, the company had been relatively open about its numbers and direction. A new VP of Sales had been hired, and its executive team began having more meetings with themselves than with the employees.

Soon, territories were being realigned. Specific accounts were shifted from one rep to another. Commission plans were changed and private commission promises were made. “Covert” was the operative word. I was brought in to analyze their sales operations but found (and reported–ahhh, the beauty of the consultant…) that sales operations weren’t their dysfunction.

So, what happened? Implosion. When the level of secrets met with the growing dissatisfaction of the sales force, there was a screeching halt of productivity. Why, the reps grumbled, would they work in this uncertainty? And so they started leaving.

As I’ve stated before, there are a lot of individuals which make a company run, but sales is the engine. If you don’t have any sales, you don’t have any revenue. And without revenue, you don’t have a business.

This particular story isn’t finished yet, so I can’t wrap this story up with a bow on how the company had its happy ending. It is a work in progress, and I’m watching them closely.

So, these are anecdotes, and maybe you’ve seen something similar. But my point is, no matter what the size of the company, transparency matters. If people know what they are working for, and feel valued providing value to the company, then magic happens. If people work without trust, then they will always have one foot out the door. Which do you want? Which would help your company be its best?

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

Incentive-Based Selling: Are You Incenting? or Dis-Incenting?

In many a post, I have presented a lot of info and asked a lot of questions around compensation.

My many-a-time rant tends to focus on retaining talent and fairness, and the sales rep’s ability to achieve quota and earn commissions.

But there is a problem in River City, and it doesn’t rhyme with “p”. It is in how incentives are being crafted.

Recently, I attended a webinar about Crafting Commission Structures sponsored by Datafox. The webinar had two presenters, one from Zendesk, the other from Salesforce. Both of them were in the position of crafting compensation plans for their sales people.

First, the positive parts of the webinar: It was brief, focused and insightful. The speakers were articulate and informed and presented well. As a matter of fact, they probably don’t even realize they said something which annoyed me!

What did they say? Without realizing it, they said compensation plans were crafted so only a percentage of the sales force achieved them.

Let me back up and explain. Research has shown selling compensation models, i.e. quota attainment models, are actually dis-incenting to sales people. In my observation, for highly paid technology sales people, the typical scenario is a sales rep achieves quota one month (or quarter/semi-annually/annually) and are then reset to zero starting with the new compensation period. It is a Sisyphean task: sell, sell, sell and then get set back to zero. Daniel Pink discussed in his book Drive and in an article for the Harvard Business Review how this type of sales methodology doesn’t use intrinsic motivation to reward the rep and actually can dis-incent the rep since they never achieve a true finish line. His analysis created a significant backlash from those who said (IMHO from an emotional perspective) he was wrong (see this example, a person whose living is made off crafting sales compensation).

There is some truth in the disagreement, and I don’t deny that. But where I see the problem lay is in the quota itself.

In the area of sales with which I’m most familiar, information security sales, the advertised On Target Earnings (OTE) for outside sales positions is usually north of $200k. While I know several reps who earn and have earned considerably higher than this, I also know several reps who haven’t made quota, and here is why I have an issue–the truth is they were never supposed to make quota.

Based upon the Zendesk Senior Sales Compensation Analyst,
Strategy & Planning, Caitlin Ferson, the expectation is that between 40-60% of sales reps will achieve quota. Her explanation is that with current OTEs hitting such high numbers, quotas are being designed with an (implicit) expectation of failure. Which means 60-40% of your sales reps WON’T achieve quota.

Does anyone see a problem here?

My mantra of “If the sales rep is making money then the company is making money” is based upon the idea that the company is compensating the rep FAIRLY. Planning for a sales rep to fail so that the company doesn’t have to pay them is, quite frankly, immoral.

The company should be planning fairly for salary + incentive = achievable target for earnings. If it isn’t achievable, then don’t advertise the position for hire.

A great compensation plan is one where the rep achieves quota, receives commissions, and the company earns revenue. Call it simplistic, but it works.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

How Do You Groom Someone for Management?

There is an interesting conundrum in sales–becoming a manager.

Why is this a conundrum? Because current wisdom creates a manager one of two ways:

First: The most successful sales rep earns the opportunity to become the manager because they have demonstrated they are revenue producing machines.

Second: The person at the company with the longest tenure is tapped for management because of the number of years endured in the trenches.

Sound familiar? Have you watched the #1 sales rep get promoted to management because they’ve blown it out quarter to quarter and this is the natural reward for beating the comp plan? Or have you watched the succession of people move up to management like marbles through a straw based upon cumulative years, kind of like a “first in first out” strategy to rotate food in your pantry.

Why am I sounding negative about this?

Because in a data driven sales operation, the difference between people who aspire to management and people who become management have more reasons to be management than winning a race or outlasting their competition. This is not Survivor, we are not trying to “Outwit, Outlast, Outplay” our co-workers. We are trying to work together to grow company revenue and our compensation.

Let’s pick apart why promoting your best producer only on the metric of exceeding quota is a problem. The first, most glaring problem, is you have taken your best producer and removed them from a quota bearing position. Have you created a mechanism to fill the void they are leaving? And I don’t mean by hamstringing your new manager by asking them to continue to carry a quota as well as manage a team. Next, has the rep shown interest in managing? If you are placing them in a position which they didn’t want, you might be creating a new problem. And last, why is this person qualified to become a manager? Is it their relentless drive to achieve quota? Is it how they know how to get things done inside the company? Or is it their demeanor and the respect they garner from fellow employees?

If you are in sales, you’ve seen more than one individual who is a manager but really shouldn’t be.

Let’s look at pushing management through by tenure. This rewards someone for their cockroach survivability. It does not take into account any of the aforementioned issues, nor is it putting someone who is the most qualified into the position. They could be the most qualified, but tenure based promotion does not prove qualification.

The fact is, your company should be training people on becoming a manager as soon as they are hired. Plans for succession should be in place (like other SOP’s I’ve discussed) and those who truly want to become management will complete the tasks required to become management.

Tasks like taking some courses, getting a certificate, or even paying for them to get an MBA (there are ways to structure this to get paid back if they leave before you get any return on your investment).

Yet still, this doesn’t mean they are going to be a good manager. Allowing wannabes to succeed at some manager-esque tasks gets them to cut their teeth. And then, when the day comes, you select what you think will be your best choice. And then help as needed. Let this new hire learn from their mistakes, step into the role and manage.

Will they succeed? Who knows? But if you have been working towards the moment when that person steps into a management role, then their chances of succeeding are much greater than dropping a body in and saying, “Good luck!”

In researching for this there are a lot of articles about managing, but very few on bridging that gap between entry level employee and the first step up the ladder. Which I find incredibly interesting in light of the statistic which says the majority of sales reps leave a company because of their manager over all other reasons.

A good manager is the conduit and the filter from upper levels to the trenches. As I’ve said before, this position is a critical “promote from within” role as you are enabling your front line’s success. Make sure you promote wisely, and as I’ve heard said, wisdom is simply knowledge applied well.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

Commissions – Fair Compensation

In the levels of Sales Operations, behind streamlining the selling of products and services and then getting paid, a perennial topic discussed with my peers is compensation. And, sadly, most of it is negative. The usual stories fall into similar categories: the comp plan is unreasonable, the territory unmanageable, the accounts duds, management doesn’t get it, etc. And while sometimes what they complain about really isn’t an issue, it is amazing to me HOW companies pay the people who actually provide the foundational cash to keep the business running and the lights on. It baffles me that leadership regularly declares it wants, no, demands excellence, and then strategically and negatively manipulates those very incentives which they believe lay out a path for the sales person to achieve that excellence.

Where am I going with this? First, let me back up and talk about balloons.

Many years ago, one of my brothers had a drinking buddy who did well financially. He pulled in great money and had a nice lifestyle. People were always chiding him that he made his living off a bunch of clowns. When I probed why they would say this, I was told he sold balloons and was one of the top sales people in the region. As usual, this sets my thoughts turning about sales and the processes of sales, and I realize 1) people are needed to sell anything–from balloons, to computer hardware to fake vomit. For every product, there is someone out there selling it. And 2) there is someone who is doing it well and getting compensated well for it.

Back to the story…the rep had been successfully selling balloons for years. New management came in decided they paid their sales people too much, so they changed his compensation plan. After deflating his metaphorical balloon, unsurprisingly to an outside observer, management sees he was suddenly no longer selling as many balloons. Management decides this is a sales performance issue, and eventually the two part ways. The company’s onetime top rep is now no longer with the company, and, again unsurprisingly, soon afterwards the company was struggling financially.

What happened? While I don’t actually have the skinny from inside the company, my guess is a newly hired executive looked at the rep and thought he made too much money. Or maybe, because I have seen it happen, didn’t like that the rep made more than him. So, to stop this egregiousness, the company structured his plan so they captured more profit and paid the rep less. In essence, they dis-incented the rep.

Story number two. Top rep in the company year over year. The rep continues to sell more, and the company continues to pay more. This continues year-over-year for his tenure. At one point, the sales rep’s revenues represent over 10% of the companies annual revenues, almost $100MM, which on his own would make him a medium sized company. In his last year he is paid exceptionally well on his sales of $100MM, and then a management change occurs. The previous year, the rep’s quota had been set at $75MM, and even he will admit, because of external circumstances, two of his customers represented about 80% of his number. The other 13 customers represented the other 20% of the $100MM. He hit and exceeded the accelerators the company had put in place. He literally “cleaned up”. So, begin this year, with new management and a new plan and what did they do? They raised his quota to $100MM, and (!) cut his On-Target-Earnings (OTE) by half. They have actually dis-incented the rep to work harder–essentially saying his effort was worth less this year than last.

Companies are in business to make a profit, and they need to compensate their salespeople to sell more, not less. Capping plans, creating barriers to success through complex percentages on sales, negative compensation on not meeting minimums do nothing but create bad blood among the people the company relies upon to provide revenue.

Sell more? Get paid more. That’s incentive. No fine print, no caps.

One more story to hammer this home…My wife’s grandfather sold for a paper company starting back in the 1930’s. He was old when I met him–88 and not as spry–but he was a legend among his friends for his salesmanship and his golf game, and there were some pretty legendary stories about him. Being an incredible salesman, it is said he sold ten times what his nearest peer did, and also made A LOT of money. A LOT. (Apparently at one point he belonged to three country clubs being the avid golfer he was.) One day, after a particularly good month, the president of the company came to him to personally deliver his commission check.

The president was apparently fidgeting with an envelope in his hand. He leaned over in a very patriarchal way and said, “George, I just want you to know that this is A LOT of money.”

George laughed while removing the check from the president’s hand and politely responded right back, “Sir, that means I sold A LOT of paper.”

And he was right. He sold a lot of paper, and he should be paid for it. Unless I’m misunderstanding it, the more paper he sold, the more profit the company made. The president shuffling over to tell George how much money he was “giving” him implied that he was somehow doing George a favor. And really, it was George who had performed the favor for the company.

What’s the takeaway from all this? Pay your reps–if you practice incentive based compensation, then don’t forget the more they make, the more the company makes.

As Smart Sales Operations go, setting quota is important, and I will be covering that topic periodically, but the reason for a quota is not to set expectations on how your reps will be paid, but to set expectations on how much money the company should make.

Look at how you compensate your sales people and earnestly evaluate if you are compensating them in the company’s interest, or theirs. There is a delicious, soft chewy center for both.

And remember: If the sales rep is making money, then the company is making money.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

Promote from Within or do Without.

What happens when a person from outside an organization is brought in for a higher level position, e.g. executive vice president, vice president, or first line manager?

Well, it depends…but I will say, based upon anecdotal evidence, that depending upon the level which the new hire is placed, it can be anywhere from transformative to strategic to downright disastrous.

And why? Because the lower in the food chain of an organization, the more important someone is who knows the company. Especially first line managers, since they are really “information encyclopedias” for their direct reports. That first line manager is there to help bridge that gap between company knowledge and company culture and the rep. If you place an outside hire in position as a first line manager, then starting the position they have two tasks, not just one: they have to learn the company culture as well as learn the company knowledge. And when it comes to making those in the trenches successful, understanding where to go to get things done is invaluable to the front line. If the manager has to go and find out how things are done and then report that back to the rep(s), then there is a delay and a burp in the process of getting things done.

Let’s set up a scenario. A small manufacturing company is looking to expand, and they decide to promote the current manager into an executive role, creating a new position, and now need to fill his or her role as a first line manager.

The company has had good people work hard for them for many years, helping to build the company to get it to this point. The employees have worked hard–people who have produced products, sold them, created marketing, balanced the books, straightened up back office messes, managed crises, and led the company to prosperity.

And then, because the company believes it needs to change, they hire someone from outside because they have “experience”.

What does that mean, they have “experience”? In some instances, it means the new hire brings skills to the table which the company needs and their current employees do not have. But in usually it means they bring in someone who’s managed people before. The owner/president/decision maker decides to bring in an outside party because s/he doesn’t believe anyone on the front line is capable of “managing”. But how did this person who is brought in gain their experience? Someone took a chance on that person, promoting them to a management position, and more than likely, from within their company. I have never seen a company hire a manager from outside a company who didn’t already have management experience.

As an example: in one company, they had gone through several marketing people. They had hired an intern who quickly proved her value, who understood social media, worked hard and had great ideas. She worked for the current VP of Marketing who had troubles not only with the fundamentals of branding and messaging, but also with the newer things like social media. Basically, the intern began to save the VP’s bacon on a regular basis. The president, realizing her worth, hired her full-time.

She then proceeded to lead their social media campaigns, e-marketing campaigns and anything else the VP didn’t understand. She continued to save his bacon and she was given a new title and a raise.

When the VP decided to leave, the president, instead of looking at who had helped the company and supported its growth–i.e. who was up and coming and understood the company’s needs–hired someone outside the company whose resume was impressive.

The new VP proved scattered and ineffective, and was replaced by another outside hire with an impeccable looking resume. Marketing foundered for several more years. And here’s where the wheels fall off the bus. The rising marketing star realized she would never be considered for the top job so she left. And suddenly there was a giant hole in the company’s marketing as all of that experience walked out the door. And not just her insights and understanding of the space, but her contacts and the relationships she had built for the company. The president, of course, groused at the lack of loyalty the ex-employee showed. That, sadly, is irony.

There are a few times when companies need to look outside their walls for talent. Ford was a good example when it admitted to itself it needed fresh eyes to look at the problems created by an insulated familial succession. But on the other hand, GM saw that hiring Mary Barra was the right move as she knew the systems and had proven herself while coming up through the ranks–which is what GM needed to straighten out the messes created by their siloed decision making.

I’m not saying “never”, as absolutes simply don’t exist in our world. But I am saying look closely at your people. Step outside of how you see them, and see how they could benefit the company. Many times building a mentoring program is a great step so that someone is prepared to step into a role that needs to be filled. In sales especially, I see this as an extremely important step, as most small companies promote the best performing sales rep to management. This will be addressed in another post, but two things here: 1) Just because a rep sells the most doesn’t mean s/he should become or is qualified to become a manager and 2) if you take your biggest producer out of the field, what have you done to your sales?

In the end, promoting from within provides continuity. It enables culture building and a sense of safety to the employees. And, ultimately, it allows for employees to grow.

If you give them the chance, they will succeed.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

PS The Infrastructure Guy and Smart Sales Operations are Trademarks of Thinks, Inc.

Work, Working Hard & Work Ethic: The Non-Intersection of the Three

First off, let me discuss guilt.

Not your Jewish mother type of guilt (“You never call me.” “But Mom, I spoke with you two days ago!”)

Or guilt around felony like circumstances (you are on your own there).

But guilt around work and effort. Not in a high school physics sense (W = f*d), but time put in for tasks involved, and overcoming guilt around how much time is enough.

In sales, one could be working 24x7x365, because really, there is always something you could be doing, like more prospecting, more marketing, more networking, more customer touches…the list goes on. In this regard, selling is an endless job, allowing those who can’t say “no” to answer to their inner guilt and do “just one more thing”. A sales rep’s personal stake to produce has a lot of guilt tied to it. Add to it management’s expectations and this guilt boils down to time spent at work.

There are a lot of expectations, and being up to speed on your field of expertise is one them. One of the things which I do a LOT of is read. It is the primary method of finding out the what of my industry, not to mention the primary method of communication in my industry. But I have guilt when I am reading articles related to my industry, because it is taking time away from doing things with my job. But, my job is dependent upon me being up to speed on things on my industry, which in turn makes me a more effective salesperson, so I need to read.

Today, I read about “Work Ethic”. I’ve been following IS Survivor Keep the Joint Running since the 1990’s, and I like a lot of what he has to say, and this treatise is no exception. Then I read his post from 2004, and what I realized is my inner Jewish mother is killing me.

Work ethic

Working less for fun and profit

If I were you looking at the title of this post: Work, Working Hard & Work Ethic, the Non-Intersection of the Three I would wonder what I’m getting at, and if I’m just advocating being lazy. But I’m not–really!

What I mean is that you have a job. If you do your job, you are merely on cruise control. If you do your job and work at it diligently, then you are “working hard” and if you ask for other projects, even though they’ll cut into family time, then you have displayed what many would call a “work ethic”.

My problem with all this is comes down to expectation. If I am hired for a sales position and given a quota, then however I achieve that quota should be of no concern to anyone. If I achieve my quota with 20 hours a week of work, then my management shouldn’t care, they should revel in and repeat my results. But if I don’t achieve my quota and am working 50 to 80 hour weeks, something is wrong, especially if I’m closer to 80 than 50.

In my last corporate selling position, there was a lot of “busy-ness”. Endless amounts of time used on tasks which weren’t enabling. Paper trail tasks to CYA for management, along with endless troubleshooting calls for products which were still not ready for prime time. In the end, my colleagues and I estimated out of a standard 40-hour work week we were in some sort of corporate exercise for up to 30 hours. But the expectation was still to hit the numbers placed before us–a minimum number of meetings, training and prospecting. When I asked my peers how they were fairing, none of them had achieved the minimum expectations across all KPIs.* In addition, due to the number of meetings during the day, it meant most evening/nights and weekends were taken up with answering e-mails.

This was on top of an unstable culture which didn’t provide any psychological sense of safety (a topic for another post), so the feeling the hammer could come down anytime was very real. This means a lot of hours were put in under the thumb of uncertainty.

Okay, you say, enough grousing. What is the solution?

Lean processes. It is the focus of this blog and it just doesn’t go away.

There are many things which could have happened to alleviate the sheer number of hours logged, but the biggest contributor would have been expectations backed by data. How many calls should a rep be expected to make? How many meetings, physical or virtual, should a rep be expected to make. And if we set this bar, what data have we used for this number?

Let me run with the meeting idea: Let’s say the expectation is 12 face-to-face meetings a week. Each meeting lasts 1 hour. The travel time to and from the meetings we’ll estimate at an hour total. Planning and set up calls for each meeting I’ll estimate at 30 minutes (I’m being very light on this estimate, since some meetings can take a lot of time and innumerable e-mails/phone calls to set up just to get all the moving parts aligned), which totals 6 hours, and all in, our rep has 30 hours out of a standard 40-hour work week already spoken for. Now add in corporate overhead, like standing meetings, etc. (see above). If it was at 30 hours like I mentioned, then the total for the week is 60 hours. And this hasn’t included time for prospecting, marketing efforts, shows, lunch and bio-breaks.

If the rep has a family, then he is probably trying to shoehorn children’s events and/or spousal commitments in some of the interstices. And then, the inevitable opening of the laptop late night to answer e-mails before the start of the next day.

If expectations were set on data, even if the numbers were set north of where the current data resides, they would still be based upon something versus opinion.

Recently in a newsletter I received, the author talked about what your worst salespeople could be telling you. One of the first things which stands out to me is the average tenure of a rep. I’ve mentioned this as a statistic before in the regard to how disruptive this is to the continuity of selling. But in regard to this article, I think it misses the mark. I know some excellent sales reps and they aren’t leaving because they suck, they are leaving because management isn’t listening to them. When excellent reps realize they are being hamstrung by corporate BS, impacting their earning potential, they leave as quickly as possible. Then, the second thing which caught my attention was “2. That You Are Tolerating Underperformance” (his typo, not mine). The author pulls info from Selling Power magazine, and talks about managing the rep through setting milestones. Five bullet points about managing through milestones, but not once a mention of how those milestones were created. Without any data, the milestone is meaningless. I can set milestones (“Grandma, although your in your mid-seventies, go run a mile today with your bum knee. Today you do it in 12 minutes, tomorrow we’ll expect 10.”) but they don’t mean anything unless balanced against data: historical data, growth data and revenue data, to mention a few.

Suffice it to say, when setting up KPIs or minimum activity standards, you have to look at what is exceptional and what would be known to produce failure. Then, target the 80th percentile and see what happens. Tweak, tune, or scrap depending upon outcomes.

But don’t just spitball it. Because if you do, you will find yourself in a situation where people aren’t achieving your expectations, no matter what your opinion is about it.

Thinks, Inc. is a consulting firm which specializes in Smart Sales Operations. If you’d like for us to come and assess your chaos, drop us a line at contact@thinks-inc.com

PS The Infrastructure Guy and Smart Sales Operations are Trademarks of Thinks, Inc.

*If a company issues unattainable KPIs, then they are setting the rep up for failure, because if they wanted to get rid of the rep then they have the proof. Not a very ethical practice, but it does happen.