Want Different Results? Change Your Definition of Success and Don’t Forget to Align the Measurements
Filed under: Crisis Leadership, Decision-Making, Leadership, Leading Change, Performance, Strategy
The old adage of “you get what you measure” is an old adage for a reason. It’s generally true.
There was the sales manager who implored his team members to focus on finding new customers. The compensation plans were based on a single revenue number, and naturally the sales reps focused on the path of least resistance by selling mostly to pre-existing customers.
Another sales manager measured activity to the smallest level of detail and paid her sales reps in part according to activities, not results. The theory was that if people are working hard day in and day out on the “right” activities, the sales will follow. This one actually worked OK until the market shifted and the rigid activity and compensation structure failed to change with the new dynamics in the market. The definition of “right” had changed.
And then there’s the CEO who wonders why his sales and marketing executives don’t seem to work with each other. Of course, they have no shared measures or accountabilities, in spite of the true need for collaboration in certain areas.
LIfe and Death Definitions and Measurements:
In a much more serious perspective and true life and death view on success and measurement, the new U.S. leader in the Afghan conflict, General Stanley McChrystal recently redefined the goals for security and success for the increasing number of troops in the region: “The point of security,” he says, “is to enable governance … My metric is not the enemy killed, not ground taken: it’s how much governance we’ve got.”
Without context and without understanding the actions being taken to support the new measurement, McChrystal’s words might ring hollow. However, the change in emphasis from defeating the enemy the old-fashioned way takes into account the reality that the people we’ve been trying to help have flocked to the other side as our traditional tactics have killed both enemy combatants and innocent civilians. The cultural reality is that regardless of prior political leanings, the son of a peaceful civilian killed by a U.S. airstrike quickly becomes the enemy combatant out to avenge his father’s death. And so on.
In support of the new definition of success, operations are being executed to avoid civilian casualties, with emphasis on providing the security needed for governance to take root and spread. Whether the strategy will work or not remains to be seen, but the shift in the measure of success is driving a profound shift in activities and approaches.
The Bottom Line for Now:
Measurement is a powerful leadership tool for driving behavior and change. Success should be clearly defined and the measures employed must reinforce the behaviors needed to drive success.
In the sales example above where the manager was concerned about achieving a healthier proportion of new sales from new customers, his definition of success was right, but his measurement system told the reps that it didn’t really matter where the sales numbers came from as long as they showed up. The simple addition of a “new sales from new customers” target in the total quota formula helped the team orient to new customer capture—a strategy that ultimately strengthened the firm’s market position versus competitors and enlarged the pool of total customers to cultivate over time.
If your results aren’t matching up to your definition of success, take a look at both your definition and your measurements. It may be time for one or both to change.
Want to Improve Sales? Leave Your Reps Alone!
I long ago accepted the fact that I’m a slight freak of corporate nature when it comes to sales or marketing. Like my left-handed writing and right-sided everything else, I’m eminently comfortable in seeing the world through the eyes of sales or the eyes of marketing.
Most individuals in those respective professions aren’t as open-minded. It’s a lot like Cubs versus Sox or Bears versus Packers. There aren’t many that get away with cheering for both.
A neighbor was out walking the dog a few nights ago and stopped to chat, which offered a welcome break from trimming the hedges. Friendly conversation turned to business and he offered his own encouraging news about his recent sales results. It turns out that he had just completed his best month ever in an industry and an economy where those words are seldom heard.
When I asked what he attributed his “best month” to, he thought for a moment and said, “Quite honestly, I think it’s because corporate finally left us alone. I’ve spent so much time over the past year forecasting and updating my pipeline and then forecasting again, and writing reports on competitors and clients, that my selling time was severely impacted. I don’t know if everyone was out on vacation or they just got tired of hearing the same story, but they left us alone to sell and the entire team had a great month.”
While there may have been many contributing factors to my neighbor’s great month, his words should echo through the halls of corporations staffed by people trying to justify their existence by sucking the life and time out of the field in an attempt to accurately explain that times are tough!
“Let my people sell!” should be the rallying cry of sales managers everywhere, as they throw a protective cover around the precious days and hours of the people engaging with current and prospective clients.
In particular, my marketing and financial friends seem to like to suddenly get close to sales reps during tough times. And while I’m all for everyone having an accurate view on reality, the interactions should be done in such a manner as to minimize the demands on the sales representatives.
As for reporting, I’ll leave it to the sales manager to be bright enough and relentless in pursuit of understanding how his/her reps are doing and what they are doing. A good sales manager does this through interaction, not through pushing paper and e-mail. A good sales manager also keeps the other groups appropriately informed, and takes the brunt of the pain and time for explaining what is going on in the market.
The Bottom-Line on the Top Line:
A wise sales manager once taught me that the only thing that sales representatives have to manage is time, and how they spend it determines their results. Help your salespeople find more time and you might just find a surprise in your P+L at the end of the month.
Sales and Marketing: Wake Up and Start Refining Your Leads
I was reminded yesterday of one of the fundamental failure points of many marketing and sales teams: lead management. This reminder was painful.
I was meeting with some savvy people who drive leads for B2B firms and the topic of lead management practices came up in discussion.
The short-story version is that in spite of tremendous advances in technology tools to analyze, monitor and manage sales leads in the three years since I’ve been charged with doing this, many (actually, the word used was “most”) firms are less than diligent in managing leads from the initial touch-point to final disposition.
“Sigh.”
This is not a new story, but it is a disappointing one, because it is so easily cured with the development of sound processes and of course with good collaboration on the part of sales and marketing executives and personnel.
While some touches don’t merit extensive processing, in my experience, if the right processes are in place, good decisions are made over time as to the handling, incubation (additional marketing) and conversion of a lead.
Unfortunately, as alluded to above, many organization drop the ball either at the initial touch-point or at some next step, when they disappear into some marketing, database or sales black hole.
Under the auspices of my original blog, Art Petty on Management, I wrote a post titled: “Sales and Marketing Managers: Use the Lead Refinery Approach to Improve Results.” I suggested that the concept of a refinery was a good metaphor for viewing the lead management process. Consider an oil refinery where crude comes in one end and through various stages and processes, different types and grades of oils, solvents and fuels emerge, and you get the concept.
In my opinion, this metaphor still holds and the inherent concepts of developing good, holistic lead management processes are more important than ever.
While I encourage you to look at my original post for the complete concept, here’s an excerpt:
The Concept of the Lead Refinery
“Leads are the raw materials that ultimately end up as closed sales. Both marketing and sales engage in a great number of activities that may start out as raw contacts and flow through a system of qualification and disposition. Trade shows bring badge scans, individuals register to download content at a web site, marketing campaigns result in inquiries and sales reps prospect in target accounts to identify projects and interest. All of these contacts enter the Refinery, although some enter at different points, depending upon their level of quality (qualification).
Some contacts remain in the Refinery to be processed (incubated) over time. Others are purged and some percentage of the contacts continues on their journey through a series of filtering steps into the selling process. Contacts are transformed to leads, qualified leads and ultimately closed or lost sales. While the labels differ from environment to environment, the process is fundamentally the same.”
Building and Tuning Your Lead Refinery:
As you might imagine from the description above, creating an effective lead refinery requires the creation of systems, processes and yes, positions that work to constantly assess what to do with a particular lead. Some suggestions:
-Define processes and terms. Sales and marketing must create agree upon and support a turnkey lead qualification process where there are common definitions of what constitutes and differentiates a touch from a contact from a lead from a highly qualified lead.
-Spend money to make money. Screw up the courage to dedicate resources to managing the lead flow and owning a good deal of lead incubation. I’ve used the concept of a “Qualifying Center” to employ talented, early career and often near future salespeople to own the leads and to work between marketing and sales to manage the flow.
The Qualifying Center reps want highly qualified leads to move to sales and they want to ensure that strategies are established to manage raw contacts that may evolve into future highly qualified leads. I have no qualms linking the variable compensation of these reps to the actual outcomes of the sales pros they are working with. In the case of a sub-$100 million dollar B2B software firm, the $300K that we spent on the Qualifying Center (full loaded) contributed mightily to supporting $30+ million in license sales. This was money well spent and it served as a critical training ground for sales as well as a great connection point between promotions and sales.
-Did I indicate that Sales and Marketing have to work together? While this is another rant for another day, there are no excuses for the CEO not ensuring that the sales and marketing executives have shared accountability for the lead and sales pipelines and the resultant flow-through. The lead refinery is not a closed loop…it must connect to the sales supply line.
The Bottom-Line for Now:
Call me old-fashioned, but at the end of the day, I need to create customers and sell services and products. While many of the tools have changed and the methods that people use to interact with us, learn about our brands and gauge are worthiness as suppliers are constantly evolving, I’m still critically concerned about connecting my marketing and sales processes to create results.
Build a lead refinery, and you might just learn some remarkable things about your marketing effectiveness. Most of what you will learn will be how to improve and drive better results faster and cheaper.
Of course, this takes discipline, hard work and accountability. Hopefully, these qualities are not in short supply in your firm.
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