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Performance Management and the Law of Cause

Posted by Tony Cole on Tue, Jun 14, 2016

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?

Topics: sales management, sales goals, performance management, sales accountability

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    About our Blog

    Founder and CLO Tony Cole has been working with financial firms for more than 25 years to help them close their sales opportunity gap.  He is a master at using science based data and finely honed coaching strategies to help build effective sales teams.  Don’t miss his weekly sales management blog insights.

     

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