sales operations Archives

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

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

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

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

Foundational HR

Many years ago, when I was in my first real job, I worked for a pharmaceutical manufacturer. As was becoming the fashion but is now de riguer, employees were required to take training from human resources for employee interaction, needs identification and conflict resolution.

At the time, it consisted of getting a group of employees together to watch a VHS video coupled with an instructor-led discussion of the different scenarios involved and what could have been done better–initially, during and after the interaction.

One of these videos stands out even after all these years. I’ve tried to track it down online, but it has probably been shelved since the fashions were out of date even when I viewed it the first time. The screen resolution was striped and grainy from repeated viewings. What stood out then and still stands out in my mind though was how it addressed what I consider foundational HR issues and things like responsibility to oneself and co-workers.

In the video, a woman sitting at her desk picks up her phone and calls a person in another department. The co-worker is male and works in IT. With few pleasantries, the woman demands help. The co-worker, in return, is short with her. The conversation ends and the woman is upset and escalates to management. Management intervenes and basically coaches the pair on how to play nice.

The group discussion I was involved with focused on characters in the video, Fred* and Velma, and their method of requesting and responding. To make the HR point, the scene and its message were supposed to be cut and dried, so I don’t fault the video or its script writers for the intended message conveyed. What raised my eyebrows was how the people who viewed the video missed what I considered the Foundational HR flaw.

So, back to the scene: after Velma hangs up the phone (remember, this was before chat and texting), she turns in her chair and complains to her co-worker about Fred. What a miserable SOB he is, etc. The co-worker nods her head sympathetically. The scene cuts to Fred, who has turned to his co-worker and is complaining about Velma wasting his time. Then he states that THIS IS THE SECOND TIME THIS WEEK HE HAS SHOWN HER HOW TO DO THIS.

After this, we, the observers, discussed how Fred and Velma should have handled the conflict. There were a lot of soft suggestions like “use a nicer tone”, and “apologize for behavior”. But something didn’t sit right with me, so I raised my hand and said, “Velma or Fred should have written down the instructions.” The discussion leader eyed me coolly and paused…and then went to another raised hand. Being young I allowed her stare to quell any further pursuit of my observation and we got back to what an SOB Fred was.

This baffled me, as the crux of the problem and what created the conflict was that Velma again needed information which was provided previously provided. The conflict was a result, but not the fundamental issue.

No wonder Fred was upset–he was just berated by someone who demanded help for a task he had already shown them how to do. The video focused on Fred and Velma’s interaction and response and how they should have handled it.

Now a few caveats. I understand the intent of the video was to demonstrate how to communicate with co-workers better. It is important as an adult to communicate our ideas and opinions without devolving into an argument and hurt feelings. People need to treat each other civilly in an office environment (and elsewhere!). And, learning better ways to express anger and frustration and avoid hostilities is important.

Some important information: First, being the monkeys we are, to quell our simian roots we begin training the our control of emotions starting at birth. Many parents call this “manners”. Second, many tasks need more than one walk through before they become fluid. Third, as the little aphorism says, “Your crisis is not my crisis,” so escalating it by screaming, yelling, arm waving, foot stamping, etc. will only make it your crisis with me responding to it with matching anger. Fourth, if the proper foundations were in place, then when this crisis appeared, its escalation would match its criticality–one does not yell “fire” in the movie theater if they see only the glow of a cigarette (not applicable today, but it was many moons ago). And fifth, if Velma had been shown the process earlier, then there should have been some documentation around to jog her memory when she was required to repeat it.

If you are familiar with six sigma and its brethren 5S, then an appendage to the 5S methodology is to incorporate a system to make information available when it is needed: right now, in a week or in a month. What Velma needed was not another explanation–that just pulls Fred away from his work and doesn’t guarantee Velma future issues–but an SOP (Standard Operating Procedure), guide, tool or template to follow to get to a point where she can complete the process on her own. If that means further training with Fred, then that needs to be built into a plan. If it means Fred left Velma with instructions or Velma took notes, then that needs to be built into a plan.

So…a few years later, different company, same video, and another instructor led discussion with a different instructor. When it came up as to what Fred and Velma should have done differently, I raised my hand and stated my same premise as before. When the instructor paused with her stare this time (they must be coached this), I continued with my observation that the solution was to make sure either Fred had left enough information with Velma or Velma had enough information from Fred so that both could go on their way and neither would have had to have angry words. Even if planning to meet again at another time for more training was better than demanding someone help you. This time I only got a little sigh from the instructor.

The moral is if you have incorporated a plan, procedure or SOP for foundational activities and information, then you won’t have to deal with Fred and Velma and their bad interaction. You could probably even hire Shaggy and Scooby to do the work for mere snacks because you would have such a great plan in place you could hire just about anyone–even a talking dog–and they could figure out the work because of all your wonderful documentation.

In the end, planning and documenting should be part of any process. When you onboard someone, you have a plan, right? Right?

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.

*My apologies to Hanna-Barbera

Smart Sales Operations – Pipeline vs. Estimated Revenue

When I began speaking about Sales Operations, I mentioned there is some bleed between selling and sales ops. One of the critical pieces which companies focus on is pipeline. Where sales and Sales Operations depart, is how pipeline is used to estimate revenue and revenue is used to determine pipeline.

What do I mean? With a few employers, when I entered in an opportunity and my estimation of percent completion, the company then provided a calculated revenue equivalent for the opportunity.

For instance, if I identified a $100,000 opportunity, and was in the initial stages, having maybe had an introductory meeting, I would set the probability at 10%. My employer shows revenue of $10,000. As I progressed through the sales stages, the probability would increase, and so would the estimated revenue, for instance at 40% equaled $40,000.

There is a problem here though, because this IS NOT revenue. It is pipeline. By forecasting revenue dollars inevitably the company would begin looking at this number as real dollars–essentially “counting chickens before they’re hatched”. This, in turn, would lead to greater pressure on the rep to close the deal. And if the deal fell through, which does happen to deals, the company would go into a tizzy. No wonder reps sandbag their deals…

When I’ve asked different companies why they do it this way, they explain it is for budgeting purposes, resource planning, etc. Okay, I can understand the need for planning for resources and budgeting, but it shouldn’t be done off of imaginary numbers. If anything, it should be planned using pipeline probability. A $100,000 opportunity with a 10% chance of closing doesn’t represent $10,000, it represents ZERO dollars and a chance at $100,000 dollars! If the deal proceeds down the pike and gets to 70%, 80%, even 90%, it still represents ZERO DOLLARS.

As a tangent, this mentality is seen in the statistical situations. If you ask anyone what the likely outcome would be if they flipped a coin 10 times, they would say five heads and five tails. But if they are flipping the coin themselves and run into a streak, say, heads four times in a row, then instead of using statistics to predict the next toss, they use their human math and predict what the next toss will be. The problem is, statistically, each toss is 50/50. It doesn’t matter if there has been a streak of heads or tails, as each toss isn’t dependent upon the previous toss or the coming toss, only the current toss. Prediction doesn’t cut it.

Why am I so emphatic about this? Because if pipeline is set up this way, it creates a situation for management to scrutinize deals farther along the pipeline as needed revenue, without considering–among so many other things which can sink a deal–competition or buyer indecision. If you’ve sold before, then I bet you’ve had a customer sit on a deal decision for many months longer than expected or you’ve lost in the eleventh hour to your competition. These things happen to even the best sales people. But to be on the hook to management for a deal which doesn’t close because management is forecasting revenue, well, that’s just bad accounting. Not bad selling.

In Smart Sales Operations, Pipeline Percents represent confidence–how much confidence does the sales person have that a deal will close. Based upon that, estimates of potential revenue are either shown at 100% or nothing. If a company is trying to use some sort of percentage to allocate resources, then it should take the quote which is in consideration by the customer coupled with where it stands in the pipeline, and forecast resource availability. This is a topic within itself, but suffice it to say, resource availability is significantly different from estimated revenue–and I can’t bill my resources against estimated revenue. Only real revenue.

And if it hasn’t been sold, then potential revenue equals nothing. Once it’s been sold, it becomes real revenue.

Last, remember once you have real revenue, then the deal is truly done when the business gets paid real dollars–and the rep gets paid commission.

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.

Productivity

I am going to preface the following by telling you I am a big believer in Lean. Most people think of Lean Methodology as something only for manufacturing, but more and more people are coming to see organizations can implement Lean practices to improve operations and internal harmony. Dan Markovitz is an avid proponent of this philosophy and he is one of my influences when I’m consulting for companies, or thinking how companies could be better.

Recently, I was listening to a book-on-CD (yes, I still do that) by Womack & Jones called Lean Thinking. The title caught my eye because I thought it would be in line with my thinking. Alas, the book, written originally in 1997, is focused on manufacturing and the gains to be had by using lean practices. But something the narrator said caught my attention and it is completely applicable to sales and sales operations.

Briefly, the discussion was around “muda” or “waste” (the big three are muda, mura & muri or waste, overburden & unevenness). In Lean Manufacturing, waste is money down the drain, either by time or production. But where it is easier (but maybe not just easy) to track down waste in a manufacturing line, the 3M’s , but mostly muda, can be seen constantly in business on the sales and marketing side.

And this is the crux of smart sales operations–we look at sales processes as additive. What do I mean? I mean instead of looking at how a sales rep gets their work done and how do we extract information from that work stream, we layer a process on that sales rep to report on that work stream.

Let me give you an example to illustrate. A new sales rep is given a book of accounts in a given territory. Then, the sales rep is given a tool like a CRM, to prospect into these accounts, build a pipeline and funnel and start to close deals. Most of you are probably nodding your head in agreement, “Yes, that’s how it’s done.” Next, management wants to track the progress of the rep, so they ask the rep to produce a report. “No big deal,” you say, as all the rep has to do is create a report in the CRM and run it and give it to management. Then, management wants to know where deals stand, so they ask the rep to produce a report. Again, you may say, “No big deal,” and the rep produces another report. Soon, management wants to meet to go over the reports, which by now has grown to multiple reports and multiple meetings. The sales representative who was hired to sell has now become a reporting fool, spending significant time on administrative tasks, and trying to figure out how to balance their time with the other priorities of the job–like achieving quota.

As a personal example, my most recent experience was a manager who asked us to create a report used only by himself so he could present the team numbers to his management, showcasing the manager in the best light possible. The report was tedious, arduous and an exercise in frustration as it required two or more hours to produce each time (it was a Word doc, and none of the information gathering could be automated). This, coupled with the one hour accompanying meeting to go over the report and then the additional one hour meeting with the team to go over the collective reports was almost criminal in how much time it sucked. When confronted about this (as every rep had) the manager would say with his default response, “It only takes five minutes.”

Tying this back to Lean, what was wrong here? Waste. Waste of time, of processes and specifically of consideration. (While you might feel consideration can’t be wasted, how many times have you thrown your hands up in the air when your patience has reached its maximum? If someone who has been trying your patience continues to come back to you with the same issue again and again, you would more than likely snap, tell them about your frustration and tell them to get their problem fixed before they came back to you again.)

The problem for all this is a foundational issue: If the data has been captured in the beginning, then there should be no reason it couldn’t be pulled in an automated report. Computers are great at manipulating data, it is what they are built to do. So why was (I’m sorry, is–he’s still doing it) my manager wasting his team’s time to pull data he could have pulled? Because he didn’t value his team’s time. Why, as in the first example, is management layering on a report when the data for the report is readily available if it is being captured in the first place?

Smart Sales Operations deals with these issues in a foundational manner. We need to first look at what’s being sold, what is important information for the sales rep to keep track of and what is important information which sales management needs for visibility, and we build our tools around the information needed.

Recently I was having a discussion with a former manager of mine who has gone on to sales performance consulting. Our disciplines overlap a little, but his perspective on sales comes from a different angle than mine–he is looking to use tools to get more out of the reps, and I am looking at what is in place which can removed/tweaked/re-worked to produce better results. In the end, we both are working with companies to get more sales, for as I have said before, if the rep is making money, then the company is making money. Anyway, back to the conversation, he is a huge proponent of Salesforce. He believes it is infinitely tweakable enough to put processes in place to get the desired behaviors from the reps. My take on Salesforce is that it has morphed from a tool for the rep to manage customer interactions cradle to grave, becoming a reporting tool for management. While my former manager and I both see each other’s perspective, what I think is at the overlap of this Venn diagram is data. What is captured, what is needed, what is reported.

I’ve spoken about clean data before, and I am a huge proponent of data hygiene. But also in consideration is what data needs to be collected and how does this affect how the collector goes about their job. Because if your sales rep is spending more time creating reports, collecting data and meeting with their managers, then they aren’t out in front of customers doing what they were hired to do. They may be internally productive, but overall, they are not PRODUCTIVE.

Help your reps be productive. No muda.

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.

Smart Sales Operations – Front Office vs. Back Office – Getting Paid, Part II

Last week I talked about processes internally for taking an order to fulfillment so sales gets paid. Knowing you have dutifully addressed all the bumps and burrs impeding your order processing in the past week, I want to address the next big looming issue: Customer Payment.

Let’s go back to last week at Company X where the sales rep has received a PO. The order gets processed and pushed through the back office, the customer has received their product and/or services, and they have been invoiced.

What happens next? In an ideal world, the customer receives your invoice, smiles at the thought of the good work or product you’ve provided, and then happily cuts a check. And Company X, in turn, excitedly rewards the sales rep by paying the rep their commission due.

Did you notice a lot of smiling and a lot of processes happening? Daisy-chained together and executed without a lapse? Unfortunately, in our more accurate world, the customer hasn’t paid, for any number of reasons, and now the invoice is thirty-days old, the goods and/or services are sixty days past delivery–meaning the customer only has a vague remembrance of Company X–and you, the sales rep, haven’t seen a dime of commission.

How does this get rectified? In a sweeping generalization, many of these issues need to be dealt with up front. And I don’t mean in PO language (a topic for another post). I mean, talking to the customer about how an order gets processed, who on their side of the company touches it and ushers it through, and what obstacles loom which could stop your company from getting paid.

Herein lies the rub. This part of the typical sales cycle is either brushed aside or avoided because it is uncomfortable. It makes the rep anxious as they don’t want to be presumptive of the sale, and it makes the customer irritated, because of the aforementioned (potentially) but also this is typically not an area of expertise and they don’t have the knowledge or understanding to answer these questions.

One of the recommendations which was made to me by one of my former managers and a mentor to me, is to have the customer purchase something small from you. Whatever you can consider “small”, it is more the exercise in getting the flywheel moving so when the big purchase comes through, the axles are greased, the engine is ready at idle, and the wheels are ready to roll.

Why? Most companies have myriad documents to sign before they can engage in business. Non-Disclosure Agreements (NDA) and Master Service Agreements (MSA) are two big ones. Ask to see a copy of the company’s PO, especially if it may contain additional language. Many times customers will state their payment terms on their PO. It is quite a surprise to send in your quote which states payment is expected within 30 days of invoicing, and see this trumped by the customer’s PO which states that the customer will pay within 45 or even 60 days of invoicing.

To hammer the PO language catch example home, a former customer of mine had a clause on its PO which stated that if the customer paid within 30 days, they would take a 3% discount off the invoiced amount. We always received payment from the company on the 29th day. Another customer paid for services on a different timeline than goods–60 days versus 30 days. Each of these smells a little rank in terms of ethics, and due to the fast paced nature of business, these iniquities were allowed–with a lot of grumbling. Only when the customer was addressed about the difficulties their policies presented to us did they relent. But if we would have known about this upfront, the surprise for me and my back office would have been a lot less.

While many companies use their purchasing policy to create a mechanism for “float” it doesn’t have to be that way. If you have done the homework and asked the questions up front, you should be able to alleviate many of the speed bumps which get your company paid and you receiving commissions.

Of course, there is much more which can be done, but consider this is a musing’s first blush.

Your task for this week? Go to that customer who is always slow to pay. Ask them if there is anything you can do on your side to get them to pay on time. And if possible, help them streamline their process.

Any better ideas for Front Office vs. Back Office? I’m always interested in learning.

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.

Smart Sales Operations – Front Office vs. Back Office – Getting Paid, Part I

One of my early sales managers used to say, “The sale isn’t final until you get paid.” And he meant me getting paid, not the company. And after many years of doing sales, I found out he spoke the truth. Why is this important in the understanding of Sales Operations? Because the entire company runs on the back of what is sold.

Jeffrey Gitomer says, “Nothing happens until somebody makes a sale.” (I’m paraphrasing here, but run with it) Loosely translated, a company has to sell something to have a company: to make payroll, to invest in marketing, to pay salaries, to have admin and HR and…the list goes on and on. But what is meant to be understood but not stated, is that your customer has to pay you for whatever has been sold for all the aforementioned to happen.

This is a critical piece. It can’t be emphasize enough how important it is to recognize getting paid for whatever has been sold completes the sale. And why am I emphasizing this so much? Because there are a lot of factors which can impede getting paid, and many of them reside within your company.

Let’s run with a scenario. At Company X, when a sales rep gets a purchase order, excitement reigns. Dollar signs flash in the reps’ eyes as they think of commissions, swimming pools and movie stars. But the PO only represents a promise to pay–first the customer needs to receive the goods or services ordered. So next step after the PO, in most companies, is the rep enters the order into a system. From there, it usually goes to various and sundry hands for further massaging and parsing to ensure the proper goods and/or services are delivered to the customer.

Here’s where Sales Operations can shine or stumble. In Six Sigma*, scrutinizing the manufacturing line for places where things can or do go wrong is expected. In sales, the process for order fulfillment is more like an archaeological dig, where process which were in place when the company started still exist, and things like root suckers appear, added on like riders to congressional bills wending their way through the approval process. People (management, administrators, the reps themselves) add approval check boxes, form distributions, departmental approvals and eventually, you have a mess.

To achieve the best process, streamlined and elegant, companies should strive for one version of the truth. When the rep places the order, all necessary information to complete the sale is captured up front. (In my ideal world, when the rep identifies the prospect, this data is entered into the CRM or crosschecked/confirmed against data if it is existing). Billing address, shipping address, PO number, contacts for billing, contacts for receiving, contacts for payment resolution, the name of the end user–whatever is needed to make sure the order can be processed. And, it should be set up in such a way that information which is needed repeatedly or will be used again doesn’t have to manually entered each time–the more times a number, address, name, value, etc. has to be entered, the greater the chance there will eventually be a mistake.

In many companies, streamlining the process is difficult because the system which is set up has too many people involved to initiate an order. In other companies, initiating the order is easy, but pushing it through the levels of approval requires hand holding by the rep–taking him or her away from their original job description, which is selling.

So with all of this back office process, what is the ultimate goal of the company and the sales representative?

To get paid.

Are you sure your processes are leading to this ultimate goal?

Now, think about things at your company. Is the same true? Are there processes in place which you know are unneeded but because there is still a blank field on the page you make someone enter a value–any value–because you haven’t gotten rid of it?

Your task this week: walk a few orders through your process from start to finish. Question everything. See if there aren’t some things which could be pared down, combined or left out completely.

And begin to make the changes which enable Smart Sales Operations.

*For great reading on Six Sigma applied to knowledge workers, I highly recommend reading Dan Markovitz’s blog: http://www.markovitzconsulting.com/blog/

More on Front Office v. Back Office next week.

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

Onboarding – Smart Sales Operations

Onboarding is the set of processes companies have in place to bring on new hires. In the computer and networking world, this includes provisioning and access to necessary systems. But there is more than just getting the new hire an e-mail address. For instance, what happens when a new sales rep gets hired? Do you have a rigorous process? or do you wing it?

What happens at your company? And what happened to your new hires in the past? And after reading this, what are your plans for future hires?

Apple is famous for its user friendliness, whether it be hardware or software, and Apple receives praise for the simplicity and functionality of its designs. And because people at Apple think about how something is or will be used, a lot of problems which an end user would potentially have encountered are circumvented. Through use testing, glitches are identified and eliminated. The burrs which would blister the experience are smoothed.

One story I remember* regarding Apple was their packaging strategy for their early systems. When the end user received their new computer and opened the box, Apple led them through it using a string. Yes, a string. Once the lid was open, the top sheet had a string attached to it, and as the user pulled things out of the box, the string connected each piece sequentially so that the owner set up the monitor, the power and the CPU in proper order, and when completed, turned on a fully functioning system. Even if the end user had no idea what each part was or where things went, Apple’s system eliminated the guesswork of putting together the computer.

That string is really a kinesthetic checklist. And I’m a big believer in checklists. If you have the chance, I recommend reading Atul Gawande’s The Checklist Manifesto: How to Get Things Right. It is a great guide to looking at situations where checklists can be implemented, and in many of Gawande’s examples, save lives.

So back to onboarding. Is there a checklist in place? One which describes the steps which should happen as a person is brought into a company? A series of checklists can and should be in place for all aspects of the new hire process, such as interviewing, first day, first week, first quarter and first year.

For example, interviewing:
Have they filled out an application?
Spoken to the correct people in the area which they will work?
Gotten rubber stamped by the hiring chain of command?
Been tendered an offer letter?
Have they accepted?
Set a start date?

Once they’ve set a start date, does the company have an internal checklist to get things done? Most companies think of obvious things like health benefits and payroll, but what about laptops, cell phones, and business cards? What about training? In our current era of “faster, faster”, many times companies leave out things because they believe it only takes up time, but what they are really doing is increasing the ramp up time.

How? Because they aren’t giving the new hire the tools to be successful internally. What makes someone become part of a company? Is it because they are given an employee ID? Or is it because they interact with HR, engineers, other sales people and admin.

One company where I started many years ago, I sat for three weeks without a working laptop. When I got my laptop I was told to order business cards–and I didn’t know how to do that and no one had taken time to write it down. All processes were tribal knowledge–and I wasn’t part of the tribe quite yet.

Action item for the week: look at your onboarding process and determine if you take a new hire completely through your company’s processes–with no assumptions of “they should know how to do that”–because many won’t.

You don’t want your new hire to be waiting around for three weeks to start becoming one of your team.

*I say remember because I can’t confirm it’s true–please correct me if I’m wrong!

More on onboarding later. Next week we begin Front Office v. Back Office.

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.