When evaluating sales performance - past, present and future - it’s difficult to figure out what information or data to trust when making decisions.  Just like investments where past performance is not a guarantee of future results, past sales performance does not guarantee anything for the future.  It gives you some, not all, insight into sales results, but it doesn’t tell you how the result was created.

Pipeline analysis (a great performance management tool) is a lagging indicator that can be used to uncover previous sales activity and give you some indication of future sales, but there are problems with that data point:

• The sales person might be putting in data just to keep you off their back
• Unless your pipeline is mapped properly with check points,
  then the probability of opportunities is subjective, not certain.
• If the CRM being used does not provide reporting on conversion ratios from one sales step to the next, you certainly don’t have information needed for intentional coaching.

Linda and I went to a “box store” to find appliances for a townhouse we had purchased.  We needed to replace all four major kitchen pieces: dishwasher, refrigerator, range/oven and microwave. We were working with a salesman and we were getting close to making a selection between models.  As Linda and the salesman were talking, Linda asked me to search for the ratings on the appliances.  This is what I found:

• Refrigerator/freezer – 4.3 – 1,200 ratings
• Range/oven – 4.2 – 2,000 ratings
• Dishwasher – 3.2 – 1,600 ratings

I hadn’t looked up the rating yet when Linda asked me what I found out.  I reported the 4.3 and the 4.2; however, as I reported the 3.2 on the dishwasher, the salesman stepped back into the conversation and asked what the 3.2 was.  I told him it was the rating on the dishwasher based on 1,600 customer ratings.  His response was “You cannot rely on those ratings.  Those ratings are based on this model two years ago when it first came out – this is a newer version of the model.”

It was so hard for me to not reply with, “So I should trust the 4.3 and the 4.2, but not the 3.2?”  I didn’t want to go there because I know how I get when I challenge someone trying to sell me something. I'm a pain in the *ss.  I cannot help it when a salesman screws up the opportunity to handle something the right way and fails.  But, that’s not my point here.  My point here in this story for this article is this:

Your salesperson, and any sales candidate you are interviewing, will also refute anything negative you ask about, but will never debate the positives.

And that is a problem if you are not aware of that and deal with it when it happens.  Case in point.  We use Objective Management Group for evaluating both sales teams that exists today and future talent to hire.  The tool has been “tested” hundreds of thousands of times and is the most consistent and reliable sales talent evaluation on the planet.  (check it out)

With this business tool, we find a mix of things that are supportive of successful selling:  Strong desire, commitment, responsibility, and sales DNA.  And there are findings that indicate hindrances to successful selling:  lack of skills in consultative selling, asking questions, hunting, closing, and qualifying skills.

Time and time again, when we review the results with the sales manager or the sales person and we ask, “What did you think?”, most of the time we can count on the following:

• I thought it was interesting.
• I’ve taken lots of these in the past and you just have to take the results with a grain of salt.
• I thought it was dead on.
• I thought the findings really depend on different situations; some of the questions didn’t fit the way I sell.
• There were a lot of things I agree with and a couple of things I didn’t understand or agree with.

We ask the sales person to then discuss the finding they want to talk about first.  Almost 100% of the time, they will want to talk about the things they disagree with. Obviously, those are the things that are viewed as “negative”.  Never, not once ever in over 20 years, has someone gone to desire, commitment, responsibility, hunting or closing findings that are positive and said,  “I don’t agree with this.  I’m really not committed, I don't have desire for success in sales, I make excuses when I fail, I suck at prospecting and I can’t even close a door.”

NOT EVER!

What they all want to focus on is the 3.2 rating to try and convince me that the negative findings cannot be true, BUT all those positive things, “Yep, that’s me.”

So, there you go.  Your salespeople, as well as the candidates, will do their best to convince you that all the positive data and outputs are accurate and true, but anything negative can be explained away.

Buyer beware!

Additional Resources:

• Sample evaluation results of recommended for hire
• Sample evaluation results of not recommended for hire
• One time use of pre-hire assessment for current sales candidate
• Lesson on how to use a success formula to evaluate sales performance
• FREE WEBINAR - Do you need stronger salespeople to meet current selling challenges? If you answered yes, then this webinar is for you. Register NOW for our September 28, 2016 webinar, "The Magic of the OMG Sales Candidate Assessment." 

A year ago this past August, I was released from University Hospital here in Cincinnati.  Doctors Augsburger and Correa had performed radioactive plaque surgery on my right eye.  The plaque stayed attached to my right eye for 5 days with a lead eye patch covering it.  I was confined to a lead-lined room.  On the 25^th, they removed the plaque (disc), sutured the eye and then sent me home for recovery. I was back to work the following Monday.

I share this story in an attempt to relate “life happens” to sales management.

Life happens in sales and sales management.  When attempting to manage a sales team, “life happens.”

• The economy tanks
• A top producer leaves
• A new producer that you thought would set the world on fire is going on a PIP
• The company has changed its product mix, offerings or pricing
• A new competitor has come to town
• A new compensation plan is being implemented
• A new CRM tool is being implemented
• The Department of Labor passes new regulations, changing the sales landscape for an entire industry 

Despite all the changes and all the “life happens” events that come your way as a sales manager, you are left with one ultimate objective – meet/exceed the sales targets established by the company.  Despite all the obstacles and challenges, at the end of the day, someone in the company is going to look to you and want to know if your team is going to hit the sales goal.

A month after my departure from University Hospital, I met with an oncologist.  Prior to the meeting, I had a blood test completed and a CT scan.  Both tests are designed to look for cancer cells possibly lurking somewhere in my body.  I am to continue this testing every 6 months for the next three years.  I will see my ophthalmologist once every 6 months.  At the end of each time period, all that matters is this: Did I go another six months and stay cancer free?

So, what do you do to get from diagnosis – life event, business event, etc. – to whatever happens next?  Answer: You do everything possible to improve the odds for success. That is what you do.

I have another doctor.  Dr. Peter Shang practices eastern medicine and is a former practicing oncologist.  When I visited with him the first time, he told me one really important thing:  Cancer hates a healthy body.  He told me that we needed to find out how healthy my blood was and make it healthier so that it could effectively fight any cancer cells.  He also told me that cancer loves sugar.  And he told me that regardless of how healthy I thought I was, I needed to get healthier.  This meant exercising 5 days a week for a minimum of 30 minutes a day.

Here are steps that are similar in personal health related problems and business problems:

• Pay attention to the symptoms
• Get a diagnosis to identify the root cause
• Analyze the root cause and identify solutions
• Determine if the outcome for doing nothing is acceptable
• If doing nothing is unacceptable, take action
• Check your commitment to stick to the plan – you must have a non-negotiable reason to stick to it

I just had the second of my six-month checkups for eye, blood and body scan.  All are good.  Also, I’ve continued to work, play tennis and golf.  I monitor my steps, my workouts, and my food intake.  I’d like to report that I’m completely off of all sugar, but I have my lapses.  I was in a great habit of not eating sugar and then, when I hit a body weight target, I allowed myself to celebrate with my greatest food weakness – ice cream.  (If you see me and we are dining, don’t let me eat dessert!)

I work out consistently, and I am healthier now than I’ve been in at least 30 years.  Every time I work out, I talk to cancer.  I tell it that it had better be ready for a fight because that’s what it’s in for.  I work out and think about others who are fighting the fight.  Doug, Ray, Cherie, Brooke and Jerry all are fighting the fight for health.  But… the major motivation is my wife, Linda. She is my non-negotiable reason to stay the course and fight the fight.

In business, you have to have that non-negotiable reason to fight the fight, to overcome the obstacles, challenges, and setbacks.  You are not always going to win the battle every second, every minute or every hour.  But, win the battle every day. Then your days become weeks and the weeks become months and the months become the first year.

In the words of the flight director of Apollo 13, “Failure is not an option!”

Additional Resources:

10 Uncomfortable Deeds that Will Make You More Successful

Download our free eBook, The Extraordinary Sales Manager

Sign up for a free demo of Hire Better Salespeople

We recently delivered a webinar specifically for one of our clients – BISA (Bank Insurance and Securities Association).  The topic was The Customer-First Advisor: How to Help Your Salespeople Survive and Sell in the Coming DOL Environment – regarding the recent Department of Labor ruling outlining the fiduciary responsibilities of financial advisors giving advice to prospects or clients. (Click here to listen to recording.)

NOTE:  This post doesn't just apply to investment advisor salespeople.  Salespeople in all industries continue to face changes in economic, competitive and company climates.  As a sales leader, it is important to recognize that those salespeople that got you where you are today probably won’t be the same ones that will get you through the other side of change unless you get them ready.

Up until this year, advisors had to satisfy a “suitability” standard when providing advice.  The problem is that sometimes “suitability” also was conflicted advice. It was “conflicted” apparently because some of the products that were “suitable” were also the ones that paid the advisors the most commission.  I have strong feelings about this and why the DoL would stick its nose in this… but that discussion is for another day and time!

As a result, one of the issues at hand is how advisors actually conduct themselves now that there are new regs in place.  During our webinar (click here to listen to recording),we asked a couple of poll questions.  Here are those questions and responses:

What does this tell us – you?

• Skills to be successful – If you look at your sales results in a 80/20 power curve, you always see that about 36% of your team represents close to 90% of the sales results. What does that tell you about the rest of the team?  Answer: They either fail in effort or execution of the process, or they lack skills.  Question: Did you hire them that way or make them that way?
• Pipeline – The question applies to anyone selling anything but ESPECIALLY if you are selling products and services of higher dollar amounts and selling B2B. Not everyone that fogs a mirror is a prospect.  Yes, people may call you out of the blue, walk into your office and ask to buy. Sell them!  But, day in and day out, your salespeople need to be looking for and talking to Zebras. (click here for book)
• Depending on how your salespeople go to the market, the first contact has to be compelling. One of our rules is this: “Don’t look, act or sound like a salesperson.”  If your people open up with how good the company is, great pricing and unbelievable service, then they are bringing nothing to the conversation that is compelling.  REMEMBER THIS from Verne Harnish in Scaling UP – People are distracted.  Prospects have lots of other people looking to take their time.  You must have a compelling message in order to get people to keep listening.
• Tracking is the name of the game when it comes to performance management. Lots of companies talk about performance management, but normally all that means is that there is an arbitrary line that someone has to cross before they go on a PIP – Performance Improvement Program.  By then, it’s normally too late. The key to performance management is to have systems and processes in place so that you can “catch them early”.

What does this mean?  It means the following:

• Regardless of the levels of success in your organization, you should constantly invest in your people so that they continue to improve important skills and learn new ones.
• Make sure that your salespeople clearly understand the ideal client in your organization and make sure that you have a process to “inspect what you expect” in terms of what segment of the market you are capturing.
• Review your go-to-market messaging and ask yourself – “Does this really differentiate us from the market or are we trying to sell the same message everyone else is?”
• Identify your sales steps. Have a process in place to calculate exactly how many of each step each salesperson has to execute in order to succeed.  Make sure that you have assumptions about the conversion ratios from one step to the next step.  These ratios will vary from person to person. Collect actual performance results.  Compare actual activity and effectiveness to target activity and effectiveness.

Additional Resources:

Building a Sales Formula for Success – Link to success formula

Tracking – Sample output of data collected

Performance management is a major component of our Sales Management Certification program.  When we graphically represent a sales managed environment, the pyramid below is how we communicate the components, how the environment is built and the order of importance.

A great friend of mine, Keith Walker, has let me borrow a video series by David Cook PhD called “The Mindset of A Champion”.  In the introduction, Dr. Cook describes the formula for performance as:  Performance = potential – interference.  I found this interesting and I would like to share my thoughts with you today.

Years ago, when we would discuss the potential of a new recruit at Iowa State University, our head coach would tell the rest of the staff, “Potential will get you fired.”  I didn’t understand it then, but over the years I have learned to understand it as it relates to performing not just in athletics, but also in business, particularly in the business of sales.  This all ties very well into Dr. Cook’s equation.

When you think about all the salespeople you have on your team today, there isn’t a single one that you hired or have been keeping on staff with the thought that you really need some people on the staff to not live up to their potential.  Nope, this is not the case, now or ever.  Every hire, every person on the team, has potential and, if you are like most sales managers, you live for the day that they live up to their potential.

Are you disappointed?  Are you surprised?  Are you frustrated?  Are you out of different tactics to take to try and get them to perform at their potential?  If so, then read on and I believe you will find some great solutions.  If you are not sick and tired yet, then come back to this article when you are ready to make changes.  For the people who are ready now, here are some suggestions to correct the problem.

1. If you hire for potential, then set a realistic time frame for the potential to be reached.
2. If you hire for potential, that means you are hiring a project: a project that requires an investment of time, money and resources. If you don’t have the bandwidth, the right systems and processes in place or the required bias toward coaching and developing people, then don’t hire people with “potential”.
3. Hire people that are plug and play.
4. To find those that are plug and play make sure you use a pre-hire assessment tool that is specific to sales success and has a high predictive validity score. (Objective Management Group’s pre-hire assessment is THE only one we use and recommend.  It tests exactly what needs testing and has a 92% predictive validity.)
5. Evaluate your own contribution to the problem.
6. Understand these two really IMPORTANT truths
   1. Your recruiting, on-boarding and development programs are perfectly designed for the results you are getting today. If people in your charge are not performing, then something in your system has to change, including you!
   2. The people that are underperforming – you either hired them that way, tolerate them being that way or made them that way. (This last item is kind of like the Olympian that finishes last.  No one trains to be last). There isn’t anyone on your team that has the intention of being last.

Let’s go back to the pyramid.  Performance management is THE base for the entire SME™ process.  It supports everything else that needs to be done within the sales environment.  If people are not being held accountable, then you have a problem.  If people are able to perform at an average level without consequences, then you have a problem. If you have people that are un-trainable and un-coachable, then you have a problem.  If you don’t have a system data collection – both observed and collected – then you have a problem(s). Actually, two problems:

1. You don’t have anything to hold them accountable to.
2. It is virtually impossible to conduct intentional coaching if you don’t know how effectively they are executing the sales process. Only data can tell you that.

Lets go back to the formula from Dr. Cook.  I believe what he is trying to tell us is that the performance of all people trying to do anything will suffer when there is interference.  In order to improve performance, the sales manager must first understand that performance management is the most important job they have.  This does not mean that they have to spend most of their time in this area – that is reserved for coaching.  But it does mean it is the priority. 

Given that it is the priority means that you, as the sales manager, must have systems and processes in place to help you determine the “interference”.  And, finally, when assessing yourself, you must determine if you have the strength of conviction and commitment to succeed in your role.  In other words, what is interfering with your potential as a sales manager? 

In my next post, I will identify – using the Objective Management Group's sales management assessment findings – common interferences for sales managers.

Additional resources:

Postwire Sales Portal link to access helpful information about:

• Hiring Better Sales People
• Coaching
• Performance Management
• Assessing Sales People
• Sales Management Certification

I assure you that the military academies are all about performance management.  IF it moves, it gets measured.

Ralph Pim and I were watching a competitive sports team practice one day at West Point.  Ralph was a professor and Director of Competitive Sports teams at the United States Military Academy at West Point at the time.  He was telling me about the coach that was responsible for the company’s competitive football program.  He told me that this individual was retired Army and the Academy hired him back to run the program as well as other duties.  I asked him, “Why would he retire and then get hired back?”  I will do my best to explain what Ralph told me.

In the military, the system works like this:

• In the military, each soldier has a rank.
• You progress up through the ranks based on merit.
• A promotion board (my words) reviews the current career of the soldier and, based on merit and recommendations, either promotes the soldier to the next level or it doesn’t.
• In the military system, there are only so many seats available at each rank in the military. (I’m assuming that that number may go up or down based on the current state of world affairs and the status of military funding.)
• A soldier has only so long to stay in a certain rank. If the soldier gets passed by a certain number of times for promotion, then that soldier is considered “not promotable” and, at some time, is “retired”.

*From Militaryspot.com:  Enlisted:  Congress passes the Defense Authorization Act each year. This is how the number of Army members that can be on active duty in the upcoming year is determined. By separate legislation, Congress limits what percentage of the total active duty force can serve in each commissioned officer rank, what percentage of the total active duty force can serve in each warrant officer rank, and what percentage of the active duty force can serve in each enlisted rank above the grade of E-4 (there are no statutory limits for E-4 and below). These amounts are then the foundation of the Army enlisted promotion system.

My question is this: why wouldn’t this work in corporate America?  More specifically, how could you, as a director of sales, make this work in your organization?  How could this become part of your motivation and “upgrading” strategy?  You would need to outline your system and then plug your “sales soldiers” into the system to see how it plays out, but let’s give it a shot.

Ranking:  Let’s assume you could have ranks that look something like this top to bottom:

• Sr. Advisor
• Jr. Advisor
• Advisor
• Account Executive
• NBD Agent

Depending on the business you are in, you could substitute the word consultant, broker or agent for the word “advisor”.

Criteria:  You would need to establish criteria to enter the sales team at a certain level (assuming you are recruiting people) and to be promoted from one level to the next.

• Year of Service – not recommended – years of service have very little bearing on merit or accomplishment. “Survival” is not a solid criteria.
• Annual New Business Production
• Book of Business or Revenue stream
• Company contribution
• Professional designations
• Professional ranking within the industry
• Compliance with and support of company values, vision, mission and objectives
• Stature in the market

Process:  You would need a process to acquire the appropriate data and information to make any kind of objective and reasonable determination for promotion.

• Clearly identified metrics for success and established standards that determine success
• Collection of data that support objective reporting of success in achieving metrics in each criteria
• Timing of reviews and announcements of upcoming promotion board hearings
• Criteria to be a promotion board member
• Establish the size – number of people – at each rank. People at the top end of the sales rank would certainly be unlimited.  Other than the top and bottom ranks, you will want a fixed number of people at each rank.  This is the only way the system works.
• Length of time someone can stay in a rank or…
• The number of times someone can be passed for promotion before being “retired”.

I’m confident that you can think of additional ops and procedures that would need to go into this process.  Establishing the process is secondary to determining if your current system and process for upgrading your sales team and promoting people (giving them new titles vs earning new titles or ranks) is actually accomplishing what it should accomplish:  Motivating your sales team to perform at or exceed expected and required levels of performance.

Too often, I’ve been part of discussions about the lack of performance of very senior people and new hires.  Too often, I’ve heard excuses about them being protected classes, managing big books of business or have only been with the firm for a year.  I get it.  Making decisions that impact people’s lives and the lives of their family is important and serious work.  And because it’s serious work, a company should have a serious approach to upgrading the team.  The company should have a serious communication process that lets everyone know exactly what the rules are and what it takes to get promoted with the team, what it takes to stay on the team and what happens when there is failure to execute as expected.

Imagine for minute the following scenario:

With this type of structure/system, you would have a career path method that is clear and objectively determined.  This will help the right people continue to be motivated to perform as expected when you hired them.  It will give you a better method to determine what to do with those that “have retired on the job.”

You may not want to position this as a “military style” of managing, as that may not be consistent with your style or your company culture.  But performance management is the fundamental contributing factor for having a team built for sales growth.

Additional Resources:

Sales Management – Complimentary Book on The Extraordinary Sales Manager

Setting Standards – Video – What if you gave your best!

National Webinar Series for Sales Management – to inquire how you can participate call 513.791.3458 and ask for Jeni Wehrmeyer or email: jeni@anthonycoletraining.com. Subject line: Participate in National Webinars