Sales Leaders – Manage Your 50% Minority5

by Tibor Shanto – tibor.shanto@sellbetter.ca

Crowd

In the past I have written about the propensity of sales leaders to accept and live with the Pareto Principle, the 80/20 rule.  For example, 20% of your reps deliver 80% of your revenues, I know one team with 9 reps, where 2 sellers are responsible for 71% of the revenue.  At one time, in the Shanto Principle I asked the question what if organizations could move the dial to 70/30, what would the impact be?

Companies continue to struggle with this reality, in many instances the 80/20 looks more like this:

  1. 20% – Top of the pack, consistently successful, adaptive and responsive to market movements, often spearheading the change in sales that are required to keep and win more business.
  2. 55% – Steady players, not always winning, or delivering 100% of plan, but put in a steady (just enough) effort to be in the 70% – 90% of plan zone.  Room to improve, but bad enough to fire (although you have to wonder).
  3. 25% – Perennial underachievers.  Steadily underperforming, while you don’t invest time in them, they are still part of the team.  While you know you should fire them, you give in to the voice that says they are better than nothing, while I look for a replacement.

You may think that the above is a variation on the traditional A, B, and C player model, many do, which is a mistake.

I strongly suggest that you look at it more like:

A Players – The top 20%, Group 1

B Players – The top half of the 55%, Group 2

C Players – The bottom half of the 55%, Group 2 X Players – The bottom 25%, Group 3

I have always argued that leaders should focus their time and attention to the A players, show the most love to those you want to lose least.  Show no time or attention to the C Players; the lack of attention clearly communicates that they either need to adopt and contribute, make their way up to B status, in order to get attention, or move on to organizations.  The B’s need to be put on a path to achieve A status.  NOTE: this is once the sales rep has been on-boarded, trained on your systems, and integrated into the process.  This could be as little as three months, or as long as a year, but there does come a point where they need to deliver on their own.    I still stand by this, but have ratcheted things up a bit, by encouraging you to not waste time, resources or emotion or keep that bottom 25%, the X Players.  Rather than pretending that they are C players, suggesting some hope, when in fact they are a toxic waste in your sales organization, meaning you have to dump them ASAP.

Accepting the Status Quo, (yes, we do it too), is riskier than many sales leaders want to pretend, and here is why.  Any way you slice it, the majority of the sales team is missing quota.  It is true that more sales teams collectively are making quota, even while most individual contributors are not.  What is the take away for those on the team who continuously are missing targets?   Sales teams are like any other collective of people, there is a perception of majority rule, and if the majority is not making quota, then that soon becomes the norm.  Not something sales leaders should encourage or tolerate, but by not acting quickly and strongly to end that, it soon becomes the norm, and worse.

If more than 50% of the team is not making quota, rationalizing becomes easy; “it’s not me, it’s the product”, “it’s the price”, “it’s the whatever”.  “After all, look at all the people who are also in the same boat, it can’t be me”.  Those few that are making quota, well they become the anomaly, the pack will stick together to comfort their own, and ostracise the others.

One of the top priorities of a sales leader, and their managers, has to be to ensure that at the minimum, more than half of the team exceeds their quota.  This needs to be done across the whole organization, and by each front line manager locally with their teams; having a patch quilt of teams that do and don’t is not acceptable.  While ultimately we want everyone to make their goal, this is a start; 50% plus of each team, and 50% plus of the whole organization.

How do you do that, a simple upward rotation is a good start.  Not only do you heavily reward success, you simultaneously punish failure.  Start with the of 10% rule, every year fire the bottom 10% of each team, not just the entire sales organization, but on each team managed by a front line manager; and if they have two teams, fire the bottom 10% from each team.  Many are often reluctant to do this, telling me they can’t afford to have a vacant territory, if you ask me, the opposite is true, you can’t afford having territories run by these X Players.  You can’t afford having your clients be attended to by these X Players.  By the way, you don’t have to wait for the end of the year.  If they are not executing the activities required to win, it will not take a year to realize things.  One company I know fires those who are in the bottom 10% three months running.  They are transactional, and can tell early, you may need to wait the year, or not.  You just need to ensure that the period you choose allows for slumps and temporary factors that you can address and correct.

As this pruning takes place, especially as it becomes the declared policy, you’ll find that those in the middle of the pack begin to self-correct and do things that drive them ahead, realizing that as the bottom is lopped off, they either move higher or face being the next to go.  This upward rotation pays dividends across the team, the C’s and B’s begin to move up, and the A’s realize they have company, and their personality trait kicks in, and they improve their game to maintain the gap with the B’s.  Lifting your results to higher and higher levels.  You may even find after a few years of this approach that you do more with less players; alternatively, expand products and markets with a more qualified and talented team.

Once you get to where more than 50% of the organization is making goal, the dynamic switches.  Rather than people rationalizing why they are not making quota, after all those who are not are now in the minority, people look for ways to make and exceed quota, and begin to share their best practices.  Majority rule!   If you do find yourself in an enviable position where all you reps are making or exceeding goals, may still be a viable way of ensuring continuous improvement and growth.

This may seem a harsh route, but as leaders, that’s why we get the big bucks, for big decisions and big differences.  Any way you look at it, it will never be as harsh as having to explain the alternative to the executive committee.

What’s in Your Pipeline?
Tibor Shanto

Accountability, Attitude, Business Acumen, Change Management, Emotional Intelligence(EQ), execution, Hiring Sales Talent, Leadership, Planning, Play to Win, Sales Culture, Sales Force Alignment, Sales Leadership, Sales Process, Sales Success

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Shared Mediocrity – Sales eXchange 178 – A Question To Sales Leaders38

Sports have trade deadlines, sales organizations have trade season, usually at the start of the year, just after bonuses are paid. What I never understand is why companies, and sales leaders  participate in this silly ritual.

You see this in almost every industry,  employees, specifically sales people, move from one market player to another.   Doesn’t matter if I am working with software companies, wireless, service providers, you name it, it is much the same.  I ask people to tell me about their sales background, and inevitably, they’ll tell they have been in the business 12 years, four with one company, five with another, and three at their current place of employment.  I once had someone who was on their third tour with the company I was training and had done stints with three other.

Why?

Unlike sports, there is no free agency where top players can go to the highest bidder.  In fact I would argue the opposite exists, the journeymen sellers are almost always B or C players.  The rock star sellers, the real proven A player are not very inclined to move, and companies who thrive on cultivating and keeping A players go out of their way to do everything they can to keep them happy and rocking.

Companies hiring the journeymen rarely understand the error of their ways, and as in sports when things go wrong they go after the coach, in the case of sales the front line manager.  The poor soul who is supposed to deliver results with other companies’ discards.  I am not saying that the managers don’t share in the blame, they do, but senior leadership should know better.  They pressure the manager to perform, fair demand, and the manager succumbs and hires an available body; not just any body, but an “experienced” body with a “book” of clients.  Right!

These sellers rarely become big hitters, some become “80 per centers”, but most continue to be lack luster performers, doing no better than they did at the last company that discarded them.  At time they manage to get out of Dodge before they are booted, but their ineffectiveness does not, it is something they carry from place to place.

Just go on LnkedIn and you can see it clear as day.  One seller I trained at two different companies in the same vertical has had five sales positions with four different companies in the same industry.  Never fired, always managing to jump before their employer’s suspicions were confirmed.  The only reason they got a second stint with their current employer was because a buddy was promoted to hiring status.

What I have also found is that rarely are these journeymen counter offered by their current employers, sure there is feigned regrets, “sad to see you go” as they hold the door open.  Whereas with the rock stars, everything is done to avoid the situation at all.

In the end I think it comes down to a lack of conviction on the part of sales leadership.  While they always talk about quality over quantity, when it comes to hiring, they seem to favour quantity over quality, preferring to have a body in a territory vs. the patience to wait for the right body.  As for the argument that at least having a performing body is better than an empty territory, I am not sure.  The journeymen will underperform, as will the territory, but a bigger cost is opportunity cost.  Who will the journeymen turn off during their stint, how much money will they leave on the table or discount in deals they do get, and how many deals will they miss just because who they are.  Their book never follows, but their bad habits that got them their do, and now instead of forging forward, you are left to deal with their mediocrity.

What’s in Your Pipeline?
Tibor Shanto

Accountability, Attitude, Business Acumen, Change, Change Management, Emotional Equations, Emotional Intelligence(EQ), execution, Hiring Sales Talent, Leadership, Play to Win, Sales eXchange, Sales Mistakes, Sales Success

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52 Sales Management Tips48

The Sales Manager’s Success Guide

Even though I was a sales manager long before I had the opportunity to get involved in training, it was my work with trainers that help me appreciate not only the real challenges sales managers face, but their importance to a successful sales team executing their sales winning consistently.

My learning came with many scars, I rolled out a global training program for my company, only to discover that the uptake was spotty, a little here, less selective there, and in some places complete adoption.  While I put some it off to human nature, regional differences, but neither of those really satisfied the need to understanding why this was.

I went back to discover that when you removed some of the noise the answer was the front line sales manager.  Where the managers had strong skills rather than a strong personality; where they adhered to the process and coached their people to succeed in executing the process, results were better and more consistent than where tried to get their teams to “sell the way I used to.”

In drafting the training plan for the next round I called it “The Year of The Manager”.  Having come to realize that a dollar invested in sales manager has a greater and longer return than one invested only in reps.  This knowledge was half the battle, the other was resources, there were a few, but they were either highly specialized, or personality driven.  We were left to improvise, and to some degree things have not changed, just the improvisation.

Well that changes today.

Today Steven Rosen releases his book “52 Sales Management Tips – The Sales Manager’s Success Guide”.  A resource I wish I would have had back in the day, and one that every sales manager will find handy and useful.  This book serves as a resource for sales managers looking to make a positive difference for their teams and companies.

Steven is a sales executive coach, speaker and author. Bringing over 20 years of sales management experience. He actively coaches sales executives and sales managers to drive performance through people.

Whether you are new to sales management or have years of experience, this book will deliver week after week in helping you lead your teams to success.

Steven shares his 52 favorite tips for a years’ worth of great performance.   Sales executives and managers who are looking for more Sales Management tips to take their game to the next level, can take a giant step forward with 52 Sales Management Tips The Sales Managers Success Guide.  You can find it on Amazon.com, or go to www.52SalesManagementTips.com find out more.

This is a fun and profitable read.

What’s in Your Pipeline?
Tibor Shanto

Accountability, Attitude, Book Review, Business Acumen, Change Management, execution, Hiring Sales Talent, Sales Management

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Hanging Out with @GlobeSmallBiz: How to develop a Winning Sales strategy45

Hanging Out with @GlobeSmallBiz: How to develop a Winning Sales strategy

Last week I had the opportunity to participate in The Globe and Mail’s Report on Business’ Small Business interview series on Google+ Hangout. As the title suggests, we discussed a number of topics relating to sales, and sales challenges important for small business owners.

This was not only a great use of the technology, but we covered a number of key issues potential pitfalls, and opportunities for small business owners.

Take a look, comment, enjoy, and profit.

httpvh://youtu.be/A3FEyN2B4dE

What’s in Your Pipeline?
Tibor Shanto

360 Degree Deal View, Attitude, Business Acumen, Buying Process, Change Management, Client Life Cycle, Demand Generation, EDGE Sales Process, execution, Forecast, Funnel management, Gap Selling, Hiring Sales Talent, Interview, Marketing, Metrics, Proactive, qualifying, Questions, Retention, Sales Interview, Sales Management, Sales Mistakes, Sales Process, Sales Training, Sell Better, Time Allocation, Video

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It’s Not Always Easy18

Earlier this week, I posted on two related or intersecting topics sales leaders need to manage and improve. First, their view of, and approach to sales training; second the alignment of their sales assets with clearly identifiable market segments.

Based on some feedback, I want to expand on some key points and make sure that the wrong message is not being taken away.

With respect to KPI’s and training, I was not saying that KPI’s do not belong as part of training initiative.  In fact there needs to be metrics, measures and other indicators to ensure that the training is effective, implemented and is delivering the desired behavioural change.  Those same indicators should then be utilized to refine training strategy and implementation.  What I was saying, and don’t apologize for, is that sales leaders need stop making decisions on training in order to meet one of their KPI’s.  Not only does this not result in training that moves the dial forward, but more importantly communicates a clear message to their sales teams.  The message is that it is OK to just go through the motion to meet the basic requirement without regard for the end result.  After all, if the VP can get by with training that does not change sales behaviour, than why can a rep take a similar view, “you wanted five face to face visits, you got five”; KPI met, sale or not.

The question of alignment extends in to training as well.  Just as you don’t want to misalign the resources based on the type of buyer involved, you also don’t want to assume that all your sales people will benefit from the same type of training.  I have written in the past that there needs to be no democracy in sales training.  Indeed, when it comes to sales training, one size does not fit all.  Many have taken a forward step of separating new recruit training and some form of “advanced” training; others created online programs better matching requirements and content.  When actively managed this moves things in the right direction, when not, which is often the case, this type of training just invites the KPI mentality highlighted above.  This happens eve when there is testing built into modules.

In the end, as with anything strategic and core to business success, it is about having a long term view and the backbone to execute, especially when long term results and success will materialize after the next fiscal quarter or year end.  Let’s start by removing the KPI for cosmetic band aide initiatives.

Next Step

  • Develop or ensure your sales process aligns with and reflects your market’s buying process
  • Make sure you have the right people on the bus
  • Use the two above to determine he right training to create success behaviour

What’s in Your Pipeline?
Tibor Shanto

Attitude, Business Acumen, EDGE Sales Process, execution, Hiring Sales Talent, HR Management, Productivity, Sales Force Alignment, Sales Leadership, Sales Training

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Sales Force (Mis)Alignment34

By now everyone is aware of the increasing talk of the need for alignment between marketing and sales, with some organizations realizing that it is healthier to look at the entire Client Life Cycle as one function rather than two. Some organization have acted on their commitment by creating the role of Chief Revenue Officer, having both functions coalesce behind a singular purpose, function and execution.

This indeed is a step forward as it aligns and consolidates the organization’s resource to better serve the most important element in selling, the customer. While it may seem basic and fundamental to mention the buyer, but they, the customer, are often absent from the discussion, and are instead represented by their common proxy, revenue.

Read On…

What’s in Your Pipeline?
Tibor Shanto

Business Acumen, Coaching, Demand Generation, execution, Hiring Sales Talent, Planning, Sales eXchange, Sales Force Alignment, Sales Leadership, Sales Management, Sales Strategy, Sales Success

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Who’s Expectations? – Sales eXchange – 11917

We often do an exercise with teams centered on expectations of roles, the frontline reps and their managers.  More often than not, there gaps and differences between the managers’ expectations of the frontline reps’ role, and the expectations those same frontline reps present about their own role.    While most of these are not fatal, some of the gaps in expectations can be costly in a number of ways.  While not fatal, even the smallest discrepancies take time, resources and money to resolve.  Even more so when you consider that the average manager waits much too long to take corrective action.

One of the reasons for this is the difference in role expectation between HR and the frontline sales manager.  The more HR is involved in the hiring process, the more pronounced the challenge is.

Ask any manager in a company with more than one layer between frontline sales rep and the VP of Sales, about their hiring process, most of the time the initial step is handled by HR. This explains not only the lame descriptions in the want ads, but also why so often the wrong reps get hired or it takes so long to get them productive.

Take skills and attributes.  Sure a member HR group to sit down with sales leaders and captures the skill sets and “attributes” they are seeking needed in a candidate.  It’s one thing to create a list, it is another to understand how it all comes together in a functional way in the field.  By extension it impacts the choices one makes.

Because of their points of reference, their view of specific attribute are different, after all there is a reason why these two individuals followed different paths.  What a sales manager see as desired assertiveness, an HR manager could easily see as aggressive.  Since everyone agreed that they are not seeking aggressive sales people, the HR manager passes on someone the sales manager would have seen as a good add to the team.

Conversely, HR may see amiability or sociability as an important attribute, while a sales manager may see that attribute a distant fourth behind trustworthiness, inquisitiveness or other attributes that will help a sales person in formulating a solution.  Again, leading to a situation where if HR conducts the initial screening interview, they may turn away good candidates, leaving the manager to select from the best of the rest.

While it is true that it would not the sales managers best use of time to screen hundreds of resumes, it is also true that the cost of having the wrong sales person on board, the resulting vacancy in the territory, and the cost of hiring a replacement is not small either.  The solution is to either have the two work together, that is rather than having one do the screening interview, then manager interview, have them both participate in the first interview.  If the candidate satisfies requirements, they then continue in the interview process.  The key challenge continues to be sifting through the initial volume of resumes, which puts the focus back on HR, who like good sales people, need to look past their biases and focus on the need of their customer, the sales manager.

What’s in Your Pipeline?
Tibor Shanto

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Attitude, Business Acumen, execution, Hiring Sales Talent, HR Management, Proactive, Sales eXchange

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None For Us, Thanks!37

This past Monday I discussed options you have in dealing with your underperforming reps.  One suggestion I made is that companies are squandering resources investing in reps who have demonstrated their inability or often unwillingness to perform at the established and expected standard.

Not surprising, I got some feedback at both ends of the issue.  There were those who thought I was on the money; and of course, who thought I was harsh, uncaring, and knocking up against HR policies.

I was asked if I would stand by my statement, and you can see the response below.

httpvh://youtu.be/WHtAFRNXKkU

I for one do not think it is harsh to expect full effort from reps, consistent coaching and leadership from front line sales managers.  I also don’t think it is uncaring to want the company and the rep to succeed.  There is no shame in not being cut out for sales, there are plenty of other important functions in the corporate world.  But, I do think it is shameful for someone to knowingly and willingly underperform, cost the company revenue, and negatively impact clients.

What’s in Your Pipeline?
Tibor Shanto

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Attitude, Business Acumen, execution, Hiring Sales Talent, Productivity, Sales Leadership, Sales Management, Video

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25% Increase in Sales Training ROI – Sales eXchange – 11547

Some aspects of sales training are easy to measure others not so, but it is a fair question when I am asked what they can expect from an ROI standpoint. For some of the more difficult to measure situation elements, I try to quantify things a bit differently.  My experience has been that about 25% of the team will jump all over it, implement it, and see exceptional improvement in the way they do things, and their results after a sales cycle or two; that lift alone usually will cover the cost of the program.  The middle 50% will see a measurable and sustained lift if their managers continues to be proactive, and we help them with that through the Follow-Through Action Plan. I then tell them that the last 25%, and they know who they are, will get nothing out of it except a free lunch.

While they always appreciate my honesty when I am asked, most are shocked when I tell them that there is no need or reason to have those people attend, often they are just a distraction for those who do want to learn and improve.

Some nod as if to agree, and then they send the deadwood anyway.  Why?

I always say there is no need for democracy or equality when it comes to sales training, why should a company or leader waste time and money on someone they know will not produce any returns, and whose time is usually limited.

Companies have shown selectivity with other training or development programs. Even within sales organizations, we see different development tracks organized for high potential individuals, so why not extend that logic to sales training.

Most VP’s I work with know who is who, and where they sit in the group.  Many do a great job segmenting their teams into A, B, and C players. The key function with the C’s is to manage them out, so why train them?  I know some feel this is harsh, I remember the feedback I got when I suggested getting rid of C players in the past.  Not only do I think that isolating the C’s is a start, I think you can have a debate about how to handle the B’s, I do support the view that the focus should be on the A’s only; but I can buy the rational for including the B’s.

Everyone in sales seems to buy into the old 80/20 rule, if you do, ask yourself how negatively your sales would be impacted by getting rid of the C players, not much if any. What if you got rid of the bottom half of you B’s?  Probably not devastating, especially if you replace a few with B+ or A reps. Now if you did that, and did that every year, you would end up with a killer sales force.   Not only will you continuously improve sales, but attract much better sales people, as they look for an environment where their talents are appreciated, where they are not ignored because their manager is preoccupied with sales people who will never make it anyways, the C players.  Given that, why train them?

I know some people don’t like to hear this, they would rather sit in the board room, hold hands and sing Kumbaya, feels good, but doesn’t do much to bring in sales or get rid of the C’s.

You measure ROI on other investments; you pass on the ones that don’t show any returns, so why not when it comes to training, forget the C’s and see a 25% improvement right out of the gate.

What’s in Your Pipeline?
Tibor Shanto

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Attitude, Business Acumen, execution, Hiring Sales Talent, Proactive, Proactivity, Sales eXchange, Sales Leadership, Sales Management

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Sales Training as The Hiring Advantage – Sales eXchange – 8515

“What happens if you don’t train them and they stay?” Freight executive

As we inch out of the recession, it appears that we will need to deal with some trends that presented themselves in the Pre-Lehman Bros. era.  One positive trend is the pending talent shortage for skilled people.  In some parts of Canada, some have felt this despite the economy, many of the trades have been lacking new talent for some time, and this will only accelerate with economic growth.

I recently read a piece outlining how there will be a shortage of capable sales people, and opportunities and or challenges this will bring.  Some would argue that there has always been a shortage of good sales people; most seem to buy into the 80/20 rule, often without even asking which they may belong to.  I guess the implication in the article is that a shortage of capable sales people will change the 80/20 to 85/15 or maybe even 90/10.  The question then becomes what opportunities or challenges does this present to companies and individual sales people (capable or better).

At the risk of coming off as self-serving, to me it seems a great time for companies and individuals to rethink their strategy to improving their sales approach, process and related skills.  It is time for these market participants to develop and implement a continuous sales improvement policy.  Some are already doing this, and are recognized as leaders because of it, and while many will acknowledge these leaders’ stature, they often don’t relate it to the way they onboard and continue to train their sales people.  Only a few leaders have a clear product/offering advantage, most recognize that in many instances, the products among industry leaders is not all that great, and as such, the real advantage is in the customer experience, which starts with sales.

As this talent shortage materializes, good and great sales people will base their decisions as to where they want to ply their craft, on who will help them maximize their skills in an ongoing way.  As a result an advantage in hiring real sales talent will be less product related, and more talent management and training related; if you can’t answer clearly and specifically when a real star candidate asks what your development strategy and road map is, you are likely going to see them join a company that can.  There is no doubt that product is still important, but just as customers want to know what your R&D commitments are, to see if you can continue to evolve with their needs, good sales candidates will take a similar view to sales training, in effect, R&D for sales talent, which also has to evolve to meet client requirements.

It is not only companies that have to concern themselves with this, but individual sales people as well.  If you are not in the “20%” group, then what are you doing to get there?  The companies that do have a plan and are proactively developing their people, will likely favour those who have shown a propensity for learning and development.  If you don’t believe in yourself enough to invest in improving, then why should they?  They will ask how you will take advantage of their investment in the process if you are not invested in yourself already.

In an economy that will get more competitive as it improves, companies will apply new measures to talent, or at least the leading companies will.  The great get greater, and the poor get poorer, just like the rest of the economy, selling is no different, so if a sales person wants to be part of a leading team, they will have to demonstrate winning habits before they are hired, one will be the time and effort they have invested in improving themselves on their own.  Many sales reps see sales training as something a company should provide; but just as you would not invest in the stocks of a company that has shown little initiative, companies will not invest in those that have not shown a similar initiative.

Here are some interesting figures: first, a 7% improvement in the skills and abilities of a sales team, yields the same results as an increase of 25% in the size of the same team; less than half of companies (in the USA) invest in formal sales training for their teams; finally, less than 20% of active sales people read a sales book in a given year.  Take all these factors, and add them to a tightening market, and it is clear that sales training is a cost effective way to gain major advantages in the market, for both companies and individual sales professionals.

What’s in Your Pipeline?
Tibor Shanto

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Attitude, execution, Hiring Sales Talent, Sales eXchange, Sales Strategy, Sales Training

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