Sales & Sales Management Expertise

Variability and the 14-Letter Dirty Word – Accountability

Tags: effective sales coaching, sales management, performance management, sales accountability

Several years ago, as part of our sales team evaluation, the skills, tendencies and effectiveness of the sales leadership team was also assessed.  The findings indicated that of the 224 leaders, 23% had at least 60% of the skills required to be an effective performance manger.  Of the 5 sales management skill sets required - coaching, motivating, recruiting, mentoring and performance management – this last one, performance management, is where the team “scored” the best. The skills/tendencies within the skill set are as follows:

  • Doesn’t accept mediocrity
  • Has no need for approval from sales people
  • Takes responsibility
  • Manages behavior
  • Asks Questions
  • Manages pipeline
  • Has beliefs that support accountability

Before digging into this topic further, just take a minute to examine these results: 

  • 224 sales leaders
  • 23% (51) with the minimum % of skills needed to be successful in their role
  • 67% (172) sales leaders below the minimum standards of effectiveness
  • Only 1 out of 4 managers, hired to do the job of managing performance and holding sales people accountable, had the skills to do so.

Assume for a minute that this might be your sales organization.  Now, you might be thinking, “I don’t have that many sales managers and so my numbers won’t look like this.”  You are right; they won’t look like this, but consider the possibility that maybe you didn’t get the 1 out of four!  How would you know?

  • Do your salespeople meet and exceed goals?
  • Do your salespeople consistently have the right volume of pipeline?
  • Do your salespeople have a tendency to have up and down weeks, months, quarters or years?
  • Do your salespeople blame the economy, the competition, the pricing, the lack of marketing, lack of support, too much paperwork for failure to prospect?
  • Have you spent a small fortune for CRM and yet still struggle with trusting the reliability of the pipeline report that you get?
  • Are people late to meetings or fail to show up at all, or leave early?
  • Does your sales manager take bullets for the failure of the sales team?

Performance Management – Definition (As defined by the University of California Berkley)

  • Performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization. The communication process includes clarifying expectations, setting objectives, identifying goals, providing feedback and reviewing results.

Hogwash!  This is part of the definition and this might suit the academics, but in the real world of business, there is something missing!  “What’s missing?” you ask.

  • Identifying and implementing Rewards for success
  • Identifying and implementing Consequences for failure
  • Implementing disciplined approaches (structured activities) to correct failure to perform effort or execution.

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The Berkley definition is kind of like the LifeLock commercial you see on TV commercials.  The bank is being robbed and customers ask the security guard if he is going to do something about the robbery.  His response is that he is not a security guard but rather a security monitor.  If all a manager does is communicates expectations, sets objectives, identifies goals, reviews results (“you are not hitting your goals”) and provides feedback (“You have to work harder”), then performance really isn’t managed; it’s just monitored.

As long had you have a sales team consisting of self-starters, self-managed, high figure-it-out people, then you are okay.  BUT, and this is a BIG BUT(T), you probably don’t have an entire team of people like this.  Short of having a team that just needs to be pointed in the right direction, an organization needs someone to manage performance and hold people accountable to individual commitments.

The organization needs someone that can reward people for success through compensation and recognition.  As important, if not more important, your performance management manager MUST be able to recognize early when people are off-track. This person must have implemented the right systems and process for early detection.  And the person must be strong enough to have fierce conversations with people when they are failing to perform.

Finally, there must be a process of disciplined and structured correction procedures so that those failing to execute have a chance to succeed.  PIPs are not the answer.  PIPs are to late to have a significant impact.  By the time you attempt to put someone on a PIP that horse has left the barn.

Additional Resources:

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What We Get a Chance to Do

Tags: time management, performance management, have to versus get to, to do list

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My wife and I just came back from Minong, Wisconsin where we visited with our friends, Barb and Gerald O’Dell.  Gerald, Barb and I go back a long way, over 30 years. We all met and worked together at Iowa State University.  We parted ways for awhile until Gerald became the athletic director at the University of Cincinnati.  Later, Gerald, a man of great integrity, decided it was time to leave UC and leave athletics for good. That was over 20 years ago.

After a day of catching up and retelling old stories (Linda, of course, heard many of the stories for the first time), we settled into a routine talking about our current lives.  In one of those conversations Gerald shared with me a practice management approach to his “to do” list.  Gerald told me that, a while ago, he consciously changed his thinking from, “Things I have to do” to “Things I get to do”.

Wow.

If you think about it, there is a huge difference between what I have to do and what I get to do.

  • I have to pay taxes.
    I get to go on vacation.
  • I have to take out the trash.
    I get to eat great meals and live in a cool home.
  • I have to go to work.
    I get to help people fulfill their potential.

The other night, I set the alarm on my iPhone.  If you’ve done this, you know that you have a chance to set the time, a chance to select a sound (the song I wake up to is “Isle of Hope, Isle of Tears” sung by the Irish Tenors – a must hear) and, if you can, an opportunity to title the alarm.  Until then, I had simply titled that alarm, “Wake up.”  It now reads, “What I get to do tomorrow.”

What’s interesting to me, though it might be boring as heck to you, is that when I see the title in the evening, it sets the tone for my night’s rest as well as the entire next day.  Instead of thinking and stressing over what I have to do, I have a smile on my face thinking about the things I get to do.

  • I get to talk to people and find out about their business.
  • I get to work with people in my company that are dedicated to our mission.
  • I get to coach sales managers and observe them improve as their skills change and confidence grows.
  • I get to talk to executives about business solutions for finding sales talent and growing sales.
  • I get to convert really cool ideas into client-focused solutions.

I’m not generally one to put forth challenges in these articles, but today I’m making an exception.  I challenge you to think differently about what you do and what your role is.  I challenge you to take some time to write down the things you have been thinking of as “have” to do.  Then, take the time to translate the “I have to” list to an “I get to” list.

But, don’t just do this as an exercise.  Invest in the process and let yourself get excited about all the things you get to do both professionally and personally.

Performance Management and the Law of Cause

Tags: sales management, sales goals, performance management, sales accountability

Here is the opening paragraph from the IQ Matix Blog – The Law of Cause and Effect by Adam Sicinski

“A person becomes what they think about all day.”

Understanding the Law

The universal law of cause and effect states that for every effect there is a definite cause, likewise for every cause there is a definite effect.

Your thoughts, behaviors and actions create specific effects that manifest and create your life as you know it. If you are not happy with the effects you have created, then you must change the causes that created them in the first place…

Change your actions, and you change your life… Transform your thoughts, and you will create a brand new destiny.

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I’ve been thinking about this for about a week. I was in Pittsburgh last week and one evening my wife, Linda, called me. She told me that our friend, Kim, had called her to inform us that her son, Alex, had an accident while long boarding.  After Linda described the injuries, one of my first questions was, “Was he wearing a helmet?”  She wasn't sure.  This led me to thinking about accidents.

The fall was not an accident. It was an unforeseen incident, but by no means an accident. There was a definite cause and a definite effect that created another cause and another effect and so on and so on until Alex tumbled to the ground which caused severe bodily injury.

(Now…switching gears…)

Recently, I did some simple math in preparation for a workshop I delivered to the BISA CEO Summit in Nashville.  As part of the presentation, I demonstrated Perry Marshall’s Power Curve and the likely diagnosis of the sales teams represented in the room.  In short – about 36% of the advisors represented by a group of 200 advisors were responsible for 95% of the productivity for the entire group.  Once I highlighted the fact that less than 5% of the total remaining revenue was being generated by over 60% of the remaining advisors, I asked the question – “Did you hire them this way or make them this way?”

This is not an indictment of the CEOs present or the firms they represented. Any one of you reading this can do the same math and, if you have 25 or more salespeople that follow the normal 80/20 rule, then you will end up with the same numbers.  The reason I ask the question about hiring or making is because that is “the cause.” 

This group of massively underperforming salespeople is not in that group by accident.  Certainly, they are not in your group by accident. I don’t believe for a second that you intentionally hired 60% of your sales team to represent less than 5% of your sales. However, even if it’s actually 15 – 20%, there is cause for alarm.  And that alarm should create an effect and that effect should create another cause and another effect… and so on…

Which causes me to go back to the title of this post: Sales Management – Performance Management and the Law of Cause.

What is it that your sales manager is doing… or failing to do… that is responsible for the effect?  Here are some questions you might want to consider when attempting to arrive at an answer to that question:

  1. What are the standards for success in your organization? I don’t mean what are the goals; I mean the standards.  In other words, I’m assuming that everyone on the sales team has sales goals, but what standard are they held to?  What percentage of the team consistently performs above 100% of the goal?  What percentage of the team consistently performs between 90 and 99% of goal?  What percentage of the team hovers around 80 to 85% of the goal, is still with you and will still be with you going into next year?  You see, that is the standard of performance that your manager is allowing.
  2. What impact is your standard for success having on the overall performance of the team?
  3. What is happening to the group just below the top tier that consistently hits or exceeds the goal? Does that group have a tendency to a) move upwards towards the top b)stay level or c) slide ever so slightly to your standard of success just before termination?
  4. How well is your sales manager actually managing pipeline? Do they actually manage it or just monitor it?
  5. What inspection process is executed to “inspect what you expect” and what is happening when what is expected isn’t getting done?
  6. How well is the manager inspecting the revenue driver activities and behaviors?
  7. How consistently are the salespeople following and executing the company sales process?
  8. What information is your sales manager using from your CRM that allows them to have productive intentional coaching discussions with the entire sales team?
  9. Finally, what activities and behaviors are you holding your sales manager to that, when executed correctly, would lead to more consistent, predictable sales growth?

Traditionally speaking, when companies think about performance management, most of the focus is on the group that is responsible for driving revenue – the sales team. What needs to happen is that anything that moves should get measured, there needs to be higher standards for keeping jobs and, ultimately, managers need to be held accountable to their own set of activities and behaviors.

Alex is home now and being cared for by his family. Let’s pray for his speedy and healthy recovery.

Additional Resources:

Sales Managed Enviroment® – A development program designed to create high performing sales managers.

Assess Your Sales Process – How effective is the sales process your people are supposed to be following and executing?

How to Win Business in Any Market at Any Time!

Tags: sales prospecting, performance management, increase sales, selling in today's market

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Selling in Any Market is one of my favorite keynote/workshops to deliver. When addressing a group of sales people or sales managers, I always create a stir when I loudly pronounce that the way to sell in any market is to “STOP making excuses and JUST SELL.”

When there are disruptions/economic conditions in your industry that cause you to get out of your normal flow in business, sometimes you end up spending more time playing defense than you do playing offense. 

In our primary markets – insurance brokerages, banking and investment services - disruptions have become a quarterly occurrence.  In my 20+ years in this business, I have asked audiences across the country if they have ever gone through a three-year period in their business when there wasn’t some sort of the disruption in the “normal” flow of business.  In short, their answer was no. In fact, disruptions in flow of business have become the norm.

In a recent discussion with one of our current client’s brokers, they described that the market is a hard market right now meaning that some prices are stable and some are going down.  As a result, some of the markets/carriers were lowering prices to grab market share.  When this happens, a broker’s own clients sometimes decide that it’s time to go for better premiums with the same coverage.  So, when this happens, brokers (like my client) have to play some defense to protect their turf.  And when that happens, brokers have a tendency to take their eyes off of prospecting – they stop playing offense.

I have several clients in the bank-owned investment brokerage business.  Last week, the Department of Labor passed new fiduciary regulations that have caused and will continue to cause a MAJOR disruption in that business.  Studies indicate that companies will literally spend billions of dollars to make sure they are compliant with the new regulations.  Not only will this require an investment of an enormous amount of money, but it will also take millions of hours invested by many for compliance training.  None of these activities are offensive in nature and so, in the end, will actually cost millions, maybe billions, more in lost productivity.

This is not necessary!  Here are just a couple of things to keep in mind as you attempt to manage performance during difficult periods:

  • Unlike 2008 (when a substantial piece of the market DID shrink), the current situation is not the same.
    1. Businesses are not going out of business because insurance premiums are going down.
    2. The amount of money in play in retirement and personal savings has not shrunk. If it’s a multi-billion/trillion dollar pile of money today, it will still be a multi-trillion pile of money once the Department of Labor regulations are fully implemented (January 1, 2018)
  • If your clients have a tendency to want to shop in a tough market, so do the clients of your competitors. Companies are in play, but you have to take the phone “off of the hook” and call them.
  • People that have invested their money with advisors that have not treated them in a way that is consistent with the new regulations (client focused/fiduciary responsibility) will be in the market to find an investment advisor/representative who will.
  • If you find that it is your smaller clients that want to shop – let them. My guess is that, if you let the bottom 20% of your insurance clients go, it will represent less than 5% of your total revenue.  One new client that looks more like your top 20% will replace at least 10 of your bottom clients.
  • If you are a financial advisor – DITTO. Frequently, my friend, Kevin Mummau from CUSO Financial, and I discuss the segmenting of books of business. Time and again, the 80/20 rule applies. Actually, based on his business intelligence, that industry looks more like 30/70.  But, still let the smaller accounts work with licensed bank reps or bring in an associate that can grow by growing with smaller accounts.

The bottom line is this: as a sales leader in an organization, you have the responsibility to keep your people focused on what it takes to win in any market, any environment.  Regardless of the score of the game, you have to…

Just like in a sport of any kind, stuff happens.  A team gets a big lead, catches a break, the wind shifts and the kick goes wide.  It doesn’t matter!  You cannot win just playing defense.

Sooner or later, you have to score more points than the opponent. That is offense!

Sales Managers Must Sweat the Small Stuff!

Tags: sales management, sales development, performance management, sales assessments

I’ve not read the book Don’t Sweat The Small Stuff and It’s All Small Stuff by Richard Carlson. It’s a catchy title and I’m sure a good read. But, if you are a sales manager responsible for developing your people and for driving sales growth, this is awful advice. I subscribe to the theory that the devil is in the detail$. I purposely made the last letter the $ sign and here’s why.

Take a look at the following Success Formula designed to help an individual salesperson figure out what sales activities they need to be doing day in and day out to be successful.

This salesperson is using personal income as their metric for success. Their success standard is $58,800. In order to do that, they must perform the formula as it is expressed here starting with averaging 20 dials per week to perspective buyers. (Do NOT get hung up on “this is cold calling and I do not cold call.” Regardless of how your leads are generated, you must do something proactively to reach out to them either by phone, text, email or other methods of initial contact. For illustrative purposes, I’ve used the word “dials”.)

Here are the details: The data tells us that this salesperson must have a certain level of effort – the 20 dials a week (average) and a level of effectiveness – the conversion ratio from one step to the next. What I am demonstrating is what happens if, instead of performing to plan in effort and effectiveness, this salesperson is off of target by just 1%. As you can see in each individual step, a drop in performance of just 1% has a negative cumulative impact of 7%. So what?

It may not appear to be much, but here are a couple of things to think about:

  • Suppose the number was 10 x greater and now the miss was over $30,000.00 instead of $3,000.00.
  • Suppose you had a team of 10 producers and 7 of them missed the mark by $30,000.00 in personal income. Their commission payout is 33%. That means each individual is missing a sales goal of $100,000.00 and you have 7 people missing the mark. Where is the $700,000.00 of sales going to come from?
  • Suppose the miss on effort is 5% and the miss on average size account is 5% and the miss on submissions to approvals (for those of you that have a product that requires underwriting or approval) is off 10% but all the other conversion ratios are met at 100%.

Look at that impact - a loss of more than $8,000 to goal! That is the scenario that is more likely to happen. We know this because we have evaluated hundreds of sales organizations and the company we use to evaluate sales organizations has evaluated literally thousands of sales organizations. One finding that always jumps out is that less than 10% of the salespeople evaluated are using a consistent sales process. (Note: we work with mostly successful companies that are trying to figure out how to be more successful, how to eliminate the variability in performance or how to maximize potential of the sales team. We don't commonly work with sales teams that are broken, so don't misinterpret this as something that only applies to companies that are failing to grow sales!)

It is a staggering percentage that less than 10% of all salespeople across all industry segments use an effective sales process. How can this be given the billions of dollars spent on sales training and sales enablement tools like SalesForce.com? But, that is the big stuff to be tackled another day. What we know is that a sales manager can make a huge impact today by sweating the small stuff. IT MATTERS!

 

Additional Resources

How good is my sales team? – Free Sales Achievement Grader

Success Formula (Free Download)

Grade your sales process – Free Sales Process Grader

The Extraordinary Sales Manager eBook - Download your copy!

 

If you could use some help NOW, Text me at 513 226 3913, Subject- Help Sales Process. Please include your name.

Wacky Idea for Sales Management - Terminate Underperformers NOW!

Tags: hire better sales people, Sales Tracking, sales management, performance management, 80/20 Principle

I’m finally going to finish the book, American Icon.  It's the story of Ford and how Alan Mullaly helped the auto dealer regain its swagger. Time after time, Ford and Mulally had to make tough decisions on underperforming business units and automobiles. If the car or unit wasn’t performing, if the buying public was no longer buying and if the manager of the unit wasn’t getting progress or growth, they got cut.

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The first time I applied the 80/20 rule was when I was asked to attend a meeting with Anthem Blue Cross Blue Shield of Ohio. I was going to conduct a workshop with the reps in the state on how to more effectively build productive broker relationships.  One of the principles of the process is to identify (using the 80/20 rule) those brokers that were getting most of the business and those brokers that were licensed but essentially doing nothing.  The idea was to spend more time with those doing more and less time with those doing nothing.

Jim Barone, sales manager for Anthem in the state of Ohio at that time, provided me a list of all the wholesalers in attendance. In addition to the list of names, there was information about their production year to date. Just for the heck of it, I applied the 80/20 rule to his group to see what I would come up with.

The group consisted of somewhere between 25 and 30 wholesalers.  When I did the math, sure enough, Pareto’s principle held true. About 7 of the wholesalers were generating about 80% of the premium.  When I took another piece of the remaining group, I found that about a total of 12 people were responsible for over 90% of the total premium. When I arrived at the meeting, I found Jim and shared this information with him.  His response was something like “holy crap”.

The problem that Jim had (and the problem that anyone has in the channel development business or in business where you have to have representation wherever you have a "branch") is that there is a belief that you have to have a body in the seat where a desk is. Twenty years ago, when I was working with companies like Anthem, that was true.  With technology today, I’m not sure it is anymore.

Here’s my wacky idea for sales managers: Terminate those bottom 20% that are not producing.  Not in 30 or 60 or 90 days.  Right now. Ohio is an employment-at-will state. Meaning that, unless you have a contract for a stated specific time period, an employee can be terminated without cause. If you have to, give them 30 days to find a new job, but get rid of them. They are costing you time, money and effort.

Now, start replacing the bodies. But don’t replace them with high cost sales people that won’t be any better than what you just terminated and take a long time to break even.  Instead, look to your top producers and those in the 2nd and 3rd quintile and ask yourself this question: How much more effective/productive could this group be if I provided them with the right sales support?

Why would you do this? There are several reasons, but the one I’m thinking of is this - to build your own sales team instead of trying to draft one.  Think about how hard it is to find really good, solid sales people that can have an immediate impact on your current sales people.  Think about all the "stuff" you’ve heard from your top tier sales people about support, paper work, meetings etc.  Yes, I know they are excuses, but suppose you put an end to them?

Suppose you went out and found people that were talented at account management and farming books of business? They know the technical side of the business, but maybe they aren’t great at hunting, networking and developing new relationships. Or, maybe they can become that, but they are new in their professional careers and just need exposure and experience to sales!

To do this, you need to do more than just go out and hire them.  You have to have systems and processes in place and then make sure your sales people use the support talent and stop making excuses.  You have to have a development plan for these new hires so that they learn selling. You have to make sure you have data collection systems in place so that you can more effectively coach the sales people you have today that are not reaching their potential.  And, you have to have the career advancement process in place so that your new support people know what they are aiming for and your experienced sales people don’t think that the only way to advance is to become a sales manager.

I know this is wacky.  But how wacky is it to keep 33% of your team that represents less than 10% of your revenue?

Hire the right people – Hirebettersalespeople.com

Building your sale environment – Sales Managed Environment Certification

 Free book download - Effective Sales Management