SCORECARDS DO NOT DRIVE SALES GROWTH

I don’t believe that scorecards drive sales growth. I say “believe” because I don’t have any definitive proof one way or another and I’m not about to sort through over a million responses from Google search to find out.  But, instead, I will tell you about my experience and exposure to scorecards and the impact they can have.

TRACKING THE RIGHT INFORMATION FOR IMPROVEMENT

My golf experience would not indicate that scorecards improve my golf game.  However, many years ago, I decided to do more than just keep score.  I also tracked fairways and greens hit in regulation and the number of putts I took on each hole.  (Full disclosure here:  I am a lifetime mid 90s’ golfer which gives me a handicap in the low to mid 20s.) The year I decided to track more information, I set a goal to get under a 20 handicap.  At that time, I didn’t play a lot of golf – no more than 20 times a year, but I managed to end the season at an 18.  I believe that tracking the RIGHT information on the scorecard AND setting a goal AND working to improve metrics are what led to meeting the goal of making improvement.

I’ve been in two meetings this week where scorecards for performance were presented.  One scorecard was really a financial data update reporting on actual performance against goal and year over year.  The other scorecard reported on various initiatives and the current stage of completion. The stages were reported as:

• Green – on track or completed
• Yellow – close to being on track or completed
• Red – not on track to be completed by deadline

THE REASON SCORECARDS DO NOT ALWAYS WORK

When Alan Mullaly left Boeing to take over Ford (see scorecard info), he implemented the Green, Yellow, Red scorecard concept that served him so well at Boeing.  If you read the book, American Icon (a GREAT read, by the way…), you find out one of the reasons they cannot be directly connected to sales growth.  Spoiler alert – not everyone reporting the status of the project is courageous enough to tell the new CEO when his or her project is not on target.

Alan met with the leaders of his production teams every week to get an update on progress being made.  The leaders had to report on what they were responsible for as Green, Yellow or Red.  For months, there was never a Red status on any project.  Alan knew that this could not possibly be true, but he let it ride.  He was certain that, sooner or later, someone in the group was going to step up and be willing to take some bullets.

Sure enough, a car launch that was scheduled for the holiday season was behind schedule and was in jeopardy of missing the launch date entirely.  The manager of that division decided that he’d rather take the bullets now rather than later and so he reported RED!.

(Back to my meeting…)

Nothing on the scorecard was RED.  As I sat there and calculated numbers on some of the various metrics, I saw that the levels of achievement year to date were in the 33% range when, to be on target, they needed to be in the 50% range.  I’m new on the committee, so I was a little uncertain as the newbie and I thought,”Should I speak up?  Is this something that has been addressed before and clarified?  Does the RED indicator show up when something is 30% or less?”  Finally, the gentleman sitting next to me asked the question, “How come we don’t see any RED?” The reasons given to the committee were both evasive and vague. 

HOW TO MAKE SCORECARDS WORK TO DRIVE SALES GROWTH

What happened next is what can happen to make a scorecard report contribute to sales growth.

• Questions were asked about the various projects in YELLOW
• Clarity was gained on the exact status
• A series of What, Why, Who, When, How, Now What questions were asked
• We arrived at standards that would change a status from Yellow to Red

The point is this:  If you are going to build and use scorecards to impact sales growth, the following has to happen:

• You have to have metrics that are both leading and lagging
• Standards have to be set and they have to be set high enough to allow growth and eliminate mediocrity
  • At or above 100% - GREEN - Good
  • At a maximum 90 to 99% - Yellow - Poor
  • Anything under 90% is RED – AND you have to be willing to call it FAILING.
• You have to have established confidence and trust in your team so that they are comfortable being truthful about the status or production, pipeline, sales activity and forecasting.

YOU HAVE TO KNOW "WHY"

Finally, if you want to be able to answer, “Yes, our scorecards contribute to sales growth” you have to understand that the scorecard is like the meteorologist reporting the weather.  Normally, when it comes to weather, that’s all most of us care about. But, when it comes to sales growth, you better want to know why it is sunny or rainy!  That is Performance Management! To make your scorecards more effective always, ALWAYS be prepared to ask questions about outcomes that are either positive or negative:

• Why are we getting this result?
• When did we know this was going to happen? (I assure you it was known, or should have been known, way before the report was generated if you are collecting leading indicator sales activities via huddles.)
• Who is or who are the DRI(s) – Directly Responsible Individual(s)?
• What did we do/you do/they do the moment they knew?
• What actions have been implemented to 1) duplicate this success 2) eliminate the problem and/or 3) slow down the negative trend?
• What is happening now? What is the current status?

Having this type of discussion is what leads to sales growth not the scorecard alone!

Additional Resources: 

How well is your team doing? Try the free Sales Achievement Grader

So, this morning, Linda and I were watching Morning Joe while talking business.  We were discussing our brand promise of, “When you lie awake at night worrying about sales growth, we lie awake at night.”  We compiled a list of questions that often haunt managers throughout the day and into the night when they should be preparing for a good night’s sleep:

• Do I have the right people?
• Are we doing the right things?
• How effective are we?
• What do I have to do to make sure we hit our numbers while we stay consistent with our vision and mission?

As we’re talking, we see a news banner at the bottom of the screen about a man who was arrested for breaking and entering a home.  He was apprehended after the police entered the home and saw his feet dangling from the chimney.  As usual, I automatically started thinking about how that related to sales, sales management, performance management, coaching, pipeline, pre-call strategies, etc.

My first question is this – “Do you have sales opportunities that are important/critical for hitting your goals and growing sales that are stuck?”

My second, but maybe the most important question, is this – “Is this particular opportunity a repeat offender?” 

QUESTIONS FOR EVALUATING OPPORTUNITIES

Now, there are 2 things to consider when attempting answering that 2^nd question.

1. Is that opportunity familiar to you and the salesperson who has entered the opportunity into your pipeline management system? (This isn’t the same as your CRM). If we’ve worked on this opportunity before and they – the opportunity – “got away on a technicality”, then this would be defined as a “repeat offender”:
   1. Not the decision maker
   2. Wasn’t able to undo the current relationship
   3. Decided to not make a change
   4. Couldn’t arrive at the price point
   5. Really didn’t have a solution that fit the features and benefits they were looking for
   6. The timing wasn’t right
2. Are other opportunities stuck in the pipeline/chimney for the very same reasons as this one – the salesperson failed to execute the qualifying steps in your sales process:
   1. No compelling reason to make a change identified
   2. Competition unknown
   3. Incumbent still part of the equation
   4. Budget for investing time, money resources is a mystery
   5. Decision making process has not been uncovered
   6. Timing or urgency of making a decision not clearly understood
   7. Agreement on next steps unclear
   8. Did not ask the question – Is this a “want to fix” or “have to fix” problem?

CMBMQHM AND WHAT YOU NEED FOR SALES GROWTH

Sales growth is dependent upon this – CMBMQHM.  My staff hates it when I make up acronyms like this.  When I put these in our learning decks, the people in my office  want to know what the acronyms mean.  I generally tell them that they don’t really need to know; they just need to make sure the rest of the deck is done correctly. I know what it means and I will explain it to the sales team we are working during our training session.  But, they insist on knowing, so here it is:

Close More Business, More Quickly, at Higher Margins

It’s almost as good as WITALAIITU. (If you want to know that one,  click HERE.)

So, what does it take to accomplish CMBMQHM?

• You have to have a milestone-centric sales system – something that can be quantified, measured and evaluated for progress towards the objective of “getting a decision”. (This is not the same as “getting the sale”.)
• You have to have a process for building a success formula for each salesperson based on that sales system.
• You have to have complete buy-in to the use of your pipeline management process. Here are the guidelines to get that buy-in. It needs to…
  • Be easy to use
  • Be effective
  • Be beneficial to the user
  • Provide you with business intelligence
  • Automatically generate and send reports to you so you don’t have to go find the information
• You have to have a system of pre-call strategy sessions for EVERY opportunity that meets or exceeds the benchmark of your top 33%.
• You have to have a post-call debriefing session for every opportunity you discuss in the pre-call session.
• You have to conduct a CSI – “Crime Scene Investigation” – for every deal you don’t get.
• Finally, you have to conduct 1-on-1 coaching sessions that are intentional.
  • They are based on the findings from your pre- and post-call meetings
  • They are based on what your data is telling you about the choke point(s) a particular salesperson is having or the most common choke point(s) for the group
  • The coaching needs to accomplish 1, if not 2, things:
    1. Change behavior
    2. Improve skill

In the next post, I’ll talk about the 5 Keys to Effective Coaching.  (Pam, don’t let me forget that is the next blog topic!).  In the meantime, here are the 9 skills needed!

Additional Resources:

Download the Success Formula Worksheet

Try out the Effective Selling System online learning demo

Sales Management Effectiveness Certification Program

At Christmas, my wife, Linda, bought me a cookbook – The Science of Good Cooking.  She gave it to me because I really do love to cook. I love to cook because I love to eat.  I’m not a foodie who is into exotic or gourmet types of recipes.  I’m a basic meat, potato, soup, pasta, BBQ, stew and sandwich kind of guy.  You’ll notice the absence of veggies in that list.  With the exception of ratatouille, steamed broccoli and sautéed French green beans, I don't do veggies.

Last night was meatloaf night.  I hated my mom’s meatloaf.  She put ketchup/tomato paste on it!  I hated ketchup as a kid and I am still not super fond of it even now.  Tomato paste is supposed to be used for just one thing – Dad’s tomato sauce for spaghetti and meatballs!  However, a couple of years ago, Linda and the family wanted meatloaf, so I found a recipe from www.allrecipes.com and I’ve been in love with meatloaf ever since.

Originally, what I didn’t know about cooking was the science that makes a dish work or makes a dish a disaster.  Over the years, I have learned that…

• Low and slow allows the proteins in meat to breakdown and make most, if not all, “tough cuts” of meat more tender. I followed the practice in smoking meats but not with the Thanksgiving turkey until this last year – WHAT a DIFFERENCE!
• The most important cooking purchase you can make is an instant read thermometer.
• And, for my meatloaf recipe, you can substitute gelatin for veal.

Once you understand the science, what you do next becomes your ART.

The food is your canvas and you get the chance to paint it any way you want.  I like food with a little zing, so I tend to add cayenne pepper and/or red pepper chili flakes.  In chili or soup, I like to add Tabasco.  In my mashed potatoes, I’ve been known to add way too much butter, half and half and jalapeno peppers.

Another example of art and science is exercise and fitness.

If you want to improve your strength or endurance, two things are required - effort and execution.  Effort is the science (math) part of the equation.  Hypertrophy (growth) of muscle and increases in endurance both rely on the SAID Principle: Specific Adaptation to Imposed Demand.  Simply stated:  if you want to improve, you must impose a demand on the system. i.e.  Lift weights for strength; exercise aerobically to improve cardio-vascular capacity. (This ties into my Nautilus years!)

Failure to impose demands on your physical systems results in atrophy – diminishing capabilities of the muscles to work or the lungs to supply oxygen.

The “art” of exercise is when you decide what you want to do to impose the demand.

• Lift weights
• Pilates
• Swim
• Bike or run long distance
• Martial Arts
• Cross country skiing

As long as you stress your systems, you will become more fit.  You muscles or lungs cannot distinguish one kind of load (training) from another.   All the systems know is that they are being taxed and so they respond with growth/improvement.

What Makes Up the Science of Sales Growth – Activities that Lead to Results

What is the science of sales growth then?  The science is the activity that leads to results.  This can be a long list, but it all comes down to this:

EFFORT

1. Networking face-to-face in the community of your target market
2. Making phone calls to the people whose names you have come into possession of (regardless of source)
3. Active social selling using LinkedIn
4. Meeting with internal partners who have access to people in your target market
5. Providing an exceptional client experience so your clients become advocates and introduce you to others
6. Directly asking clients for introductions
7. Spending time with and being a great partner with other business partners so that they can refer business to you
8. Writing articles, speaking and presenting to become the subject matter expert in your target market so that people seek you out.

EXECUTION – THE ART (HBR Video)

1. How well do you ask questions?
2. When you are making a point, do you weave in metaphors, analogies and stories or do you simply quote data and statistics?
3. How high is your emotional IQ?
4. Are your questions the type of questions that provide meaningful insight to the emotions of action or ones that uncover “just the facts”?
5. How memorable or forgettable are you when you call to talk to someone on the phone for the first time?
6. How well do you “own the room” when you present?
7. When you present, do you look, act and sound like everyone else?
8. Are you emotional, passionate and willing to do whatever it takes (assuming ethical, legal and moral standards)?

ARE YOU GROWING? (Growing Sales Article Part I)

1. What demands have you put on your behaviors to stretch your thinking and your abilities?
2. What training or coaching have you undertaken that makes you uncomfortable, stretches your thinking and broadens your scope of conversation?
3. How comfortable are you with having presidential, far reaching and/or vision creating discussions with decision makers who are resistant to change?
4. In the last 18 months, how many books have you read, workshops or webinars attended, or speakers have you listened to on TED Talks or YouTube?
5. Are you twice as smart about your business and the art and science of selling than you were 18 months ago?
6. How indispensible are you to your company and clients?
7. What do your numbers reflect:
   1. Personal income
   2. Sales goal increases year over year
   3. Your sales goal achievement compared to the best in class
   4. Your personal wealth
   5. The things you have, achieve, go, become
8. How secure is your future financial wellbeing?
9. If something happened to you today and you could no longer work, how well would your family be cared for financially?
10. Would your company enthusiastically hire you again?

As a manager of salespeople, these are the questions you need to be asking. These are the points that you need to be thinking about/considering when discussing the building of a sales growth oriented sales team.

How Sales Leadership Establishes “The Science”

The Science:  My guess is that, in your organization, you have a CRM that provides you some math to help you with the science part.  CRMs are sales enablement tools.  They are only designed to collect the data; sales leadership has to do the rest.  The rest – is the science:

• Identify the right metrics – data to collect
• Have standards applied to those metrics that force your people to grow
• Connect the metrics in a milestone structured sales process
• Create success formulas for all producers
• Compare actual performance to goal performance (including conversion ratios)
• Obtain business intelligence that is predictive of future performance
• Compare predictions to actual

The Art Needed for Growing Your Sales Team

The Art: The art of growing your sales team combines the data that you have with your coaching opportunities. There are skills required to be an effective coach.  Your ability to artfully execute these skills is what makes it easier to recruit top talent and keep the talent you have.

• Having deep relationships based on confidence and trust
• Understanding what really motivates your people
• Asking great questions that help your salespeople discover what they should be doing
• Not accepting mediocrity
• No need for approval without being aggressive
• A coaching bias – it’s more important to see your people succeed than for you to succeed

Additional Resources:

Download our Why is Selling So #%&@ Hard ebook

Watch our Sales Guy Unplugged Videos

Read more about Setting Standards

Okay… so I know you might be thinking, “What the heck does growing sales have to do with a peanut butter and jam sandwich… AND why jam and not jelly?”

Not “jelly” because… well, I really don’t like jelly. I grew up with my Mom’s homemade strawberry jam.  And, for years, I would just eat jam sandwiches because I didn’t like peanut butter. But then…

THE SALES GROWTH & PB&J CONNECTION

In 1973, I was offered a full scholarship to play football at Boston University. I accepted and signed my letter of intent but, later in the year, that coaching staff left BU and went to UConn and so I followed. 

As a senior offensive lineman at Hammonton High School in New Jersey, I was 6’4” and 170 lbs. on a heavy day.  I was instructed to consume more calories, lift more weights and ingest lots of protein to build muscle.  Peanut butter was now part of my dietary intake.  During the summer leading up to my freshman year at UConn, I would consume 10,000 calories a day.  That included breakfast and then 5 peanut butter and jam sandwiches between breakfast and lunch.  So, there you go.

As any peanut butter and jelly/jam aficionado knows, when making the perfect sandwich, you want to spread both ingredients all the way to the edges of the bread.  No bread uncovered.  You spread peanut butter on one slice, jam/jelly on the other slice and then smash the two slices together so that the combination of ingredients oozes out of the sides of the sandwich.  Then, just cut in half and eat!

The first time I heard the expression, “Let’s not spread our training program dollars around like peanut butter” was from George Emmons, then president of the community bank at Key Bank.  I asked him what he meant by that.  He said, “Tony, we have limited resources to get this done and so we have to be judicious in how we use our dollars.  We have markets like Seattle that are our highest potential growth market and then we have a market like Vermont.  Vermont is a great market for us - very strong - but we already enjoy sizable market share there, so our ROI isn’t going to be as great.   We need to invest our dollars where we get can get our greatest return.”

And there, my friend, is the connection between building a sales growth sales team and making a peanut butter and jam sandwich!

Now, on to growing sales …

“PEANUT BUTTER” AND YOUR SALESPEOPLE

When you think about your sales team, the collective book of business and the market pool, you have to be more intentional in your investment of time money and effort.  Not all of your salespeople are equal, not all of the clients represented in the book of business are equal and not all of the businesses/people/prospects that are available in the market place can bring you the same revenue, value or profit.  Given the variability, you cannot (and should not) spread your resources like peanut butter.

In my previous articles and blog posts, I’ve talked about the 80/20 principle - the simple concept that 80% of your results come from 20% of your efforts.  You can substitute efforts with people - salespeople, client people, people in the market, etc.  Having said that, I highly recommend you follow Perry Marshalls process of the 80/20 of the 80/20.  Simply stated:  Do the 80/20 math again with the remaining salespeople, clients and prospects.  See below as an example of how to segment a revenue book.  (click here to read the detailed article about the 80/20 of the 80/20).

I believe the chart is easy enough to follow.  The key things here to recognize are:

1. About 96% of your results are coming from just 36% of your team
2. That 36% isn’t tapped out – the top 3 might be, but if you add admin and support staff, you can probably get them to double productivity – spend “peanut butter” differently for this group than for the rest of the group.
3. You have great opportunity/potential in the 2^nd group of 80/20 – the next 3 salespeople (next quintile). Lots of “peanut butter” (intentional coaching) here in training, development, management, marketing/lead generation resources.
4. The last quintile - the bottom 3 people - are not going to get you to the mountaintop based on their current productivity. Unless they are brand new, they not only get zero “peanut butter”, but they also get the opportunity for alternative employment.
5. Some of the people in the bottom quintile might be there because they are new to the organization, so don't’ abandon them; however, make sure you have a very intense on-boarding program to make sure they climb into the next quintile and beyond quickly. Lots of “peanut butter” here.
6. Your middle quintiles - salespeople in the middle 33% of the company - need to get lots of attention (“peanut butter”) for a short period of time because they have to demonstrate that they can actually produce the way you thought they would when you hired them… or they unfortunately validate that you made a hiring mistake.

WHEN TO USE A LOT OF “PEANUT BUTTER”

Follow this same process when analyzing the individual books of business for each salesperson.  Your salespeople should not be treating them all the same. The top 33% of the book brings over 90% of the revenue – treat them that way – with LOTS of “peanut butter”.

And, finally, when approaching the market place, use the information/data from the analysis above when looking at the individual books of business.  Identify the common characteristics in the top 33% of the book of business and then look for new opportunities that look like your top 33%. Stop spending time, money, effort and peanut butter pursuing anybody in the market place that doesn't (or have any chance to) look like your top 33% of your current clients.  (There us a great book on this concept, Selling to Zebras)

Additional Resources:

NO MORE HIRING MISTAKES - Hirebettersalespeople.com

In my series (see previous posts) regarding the constraints to growing sales, the two remaining topics are:

• Ineffective motivation of the sales team
• The “just enough is good enough” approach to hitting setting and hitting goals
  
  

THE POWER OF THE “RIGHT” MOTIVATION

Ineffective motivation of the sales team is not uncommon and it is the subject of one of the more frequent questions people ask me: “Tony, how do I keep my sales people motivated?”  My first response is normally a question in return:  “Do you know what motivates your people?”  The most common answer: “Well, uh, yeah, I think so.”  I cannot help myself when I ask, “Do you know or do you think you know?”  Their most common answer: “I think I know.”

With that in mind, how do you possibly motivate people when you just think you know what motivates them?

What we know about motivating salespeople is that it has changed over the years.  When we first started evaluating sales teams using the #1 Sales Evaluation Assessment – Objective Management Group Sales Evaluation and Impact Analysis – the findings told us that people were externally motivated.  Motivation was money and the things money can provide.  Today, however, we see a different set of results (Read this HBR article on motivating salespeople).

The current findings tell us that sales teams are highly motivated to succeed, but the source of motivation is internal rather than external.  They are motivated by a job well done. They want to be recognized for success and they are motivated by achieving their own personal standards for success and achievement.

I was 9 years old when I walked off the football field the very first time.  I had just finished practice and my dad was waiting on the sideline for me.  He asked me what I thought and I told him I loved it.  “Someday I’m going to go to college to play football.”  Dad asked me if I was sure and I said “yes.”  He then told me, “College football players are in great shape so, if you are going to play college football, you’ll have to be in great shape. Take off your helmet and shoulder pads and start running some laps.”  I followed his advice and I ran laps every night after practice to get in shape to play college football.  In February of 1973, I signed my letter of intent to go to the University of Connecticut to play football.

My dad - my manager - knew my goal and used that occasionally to keep me on track.  Occasionally, when I would fall off the training wagon, he would ask me if I still planned on playing college football.  I would always answer, “Sure!”  He would then say, “Well, I wasn’t sure. I haven’t seen you run or lift weights in a while.”  That’s all he needed to say.  Off I went.

When you know what motivates your people, you can then have the appropriate discussions to keep them on track.

“JUST ENOUGH” IS NEVER GOOD ENOUGH

“Just enough is good enough.” THIS MINDSET DRIVES ME CRAZY!  How do you know that this is your culture?

• Year over year growth is one of the metrics you use to determine if you are getting better
• Comparing one unit in your organization against another is the way you communicate to the teams about which ones are having success – stack ranking and comparing the rank of one team against the others as a way to explain, “If they can go from #22 to #15, then so can you!”
• Hitting sales goals on the backs of the few
• You have people on your sales team who - month after month, quarter after quarter and year over year - fail to hit their sales goal.
  • I don’t mean those that are at 99% one year and 101% the next and then 95% the third
  • I mean those that consistently perform in the low 90’s or high 80’s.
  • Those people that fail to perform still earn incentive comp, are not subject to any disciplined approach to improving skills or changing behaviors
  • There is never a discussion that sounds like, “What happened to the superstar sales person I thought I hired ____ number of years ago?”

I understand how this happens. There is so much pressure to just hit the numbers that, at the end of the day, it really doesn’t matter how you hit the numbers; you just have to hit them.  But what are the long-term consequences of this sales environment?

• Turn over of really good producers that are tired of carrying the load
• Producers who are close to being really successful manage themselves downward instead of upward.
  • They witness that there are no consequences for failure
  • They become “at leasters” – “I’m not as good as Julie, but at least I’m not as bad as John.”
• Recruiting top talent is difficult because, when they talk to your top performers, they tell them that there will be a lot of pressure to perform because nothing happens to the slackers and the company depends on the top producers to make up the difference.
• When goal setting time comes around, people at the top get more heaped on them and those in the middle to bottom of pack argue that the goal you give them was never one they bought into.

SETTING THE BAR FOR SUCCESS

Bottom line is:

• Organizations have to have a mind-shift first about what it means to be successful in the organization.
• There have to be systems and processes in place to catch failure before it happens rather than when it actually happens. Failure never happens all at once. It’s gradual; however, instead of addressing the issues when they appear, managers put salespeople on “double secret probation.”
• The metrics used to determine success have to include diagnostics of the improvement of quintiles year over year. (See chart below for a snapshot of quintile performance.)  The idea is that when you take the snapshot next year, the numbers for each quintile have to be better than the previous quarter, year, etc.
• A willingness and commitment to set the bar higher for success and then hold people accountable to actually DOING the THINGS required to be successful rather than just looking at training data.

I will continue to explore and discuss these constraints to consistent and predictable sales growth.

Additional Resources:

The 80/20 of the 80/20 - What it means for your company and next steps

Get a FREE TRIAL of the #1 Sales Candidate Assessment