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Modern Sales Performance Management is all about ACTIONS, not OUTCOMES

Posted by James Pember on 5/16/16 10:37 AM

Being able to quantify performance inside an organization is one of the hallmarks of efficient management. Knowing exactly how your employees are tracking against goals and targets allows you to be able to react, coach and change direction as necessary.

However, there is a fine line between measuring KPI’s and full-on micro-management. That line is becoming finer and finer with each new generation of staff that come through our businesses.

I’ve written a lot about managing millennials (those born after 1980), and there is little doubt that when it comes to managing performance, the times, they are a’changing.

First though, a little background

Former GE CEO Jack Welch is often attributed to popularizing an intense focus on KPIs and annual performance reviews. Every year, the GE management would rank their staff on a number of core KPIs, and then fire the bottom 10%.

Staff would be placed on a curve, comprised of “A Players”, “B Players” and “C Players”. A players would be showered with bonuses and praise, B Players are are tolerated because they are such a large group and are often seen as the “core performers” and C players are let go.

During the 80’s and the following decades, this “rank and yank” methodology was picked up by the world’s biggest enterprises including IBM, Accenture, Adobe, Yahoo, HP, Cisco and many more. According to Dick Grote, a consultant who specializes on the topic, 60% of the Fortune 500 companies used some form of ranking in 2012.

Suffice to say, ranking and an intense focus on core KPIs has become a hallmark of business school teachings and operational management. However, what does the future hold for performance management?

A new era of management

As you may have already guessed, this level of ranking has become less popular over the years. I don’t want to dig into the theoretical details of why stacked ranking and Welch’s “Rank and Yank” model is becoming less popular, there are plenty of great articles to read on that topic. Here are a few.

What I want to focus on today is whether we should continue to vigorously rank and rate our salespeople.  

Sales is obviously a hyper-quantifiable function, where progress can be measured extremely efficiently and easily. In addition, sales is also an already competitive occupation, based on a) the easily measurable nature of sales, but more importantly b) the fact that most salespeople have a competitive personality type.

Whilst you must measure and track progress in order to drive engagement, the best way in which you do so is almost the most important question on the minds of management and sales leaders today.

“Command and control is what Jack was famous for. Now it’s about connection and inspiration”.

I love that quote above. Whilst the “stacked ranking” methodology was very much about Command and Control, the best managers now are thinking about Connection and Inspiration.

The key to engaging your staff is to give them purpose, make them feel recognised and steer them to perform the behaviours that lead to successful work.

The future of performance management

Adobe, GE and Accenture are just 3 examples of Fortune 500 companies who have ditched Annual Performance Reviews in over the past 36 months.

Interestingly, GE who popularized the rank and yank methodology, have also given it up - moving towards a more continuous feedback system, not purely focused on performance KPI’s, but pulling in other sources as well such as engagement and customer satisfaction.

When I think about the future of performance management, I think about 3 fundamental shifts that I think will define how we manage and measure our productivity and staff:

  1. A move from Annual to Continuous Feedback Loops
  2. Less focus on the past, more on the future
  3. More focus on softer values and “core behaviours” rather than purely results (remember, the right actions lead to the right outcomes - measure actions, not outcomes)

The world isn’t really on an annual cycle anymore for anything. I think some of it to be really honest is millennial based. It’s the way millennials are used to working and getting feedback, which is more frequent, faster, mobile-enabled, so there were multiple drivers that said it’s time to make this big change.Susan Peters told Quartz.

Ok, so finally - should we continue to rank and rate our salespeople?

The short answer is yes. Sales is a fundamentally measurable work and output must be measured. However, the ways in which we measure, report and deliver feedback must change. 

Performance Reviews look in the rear view mirror, and tell us how we performed last year. Best-in-class organisations will review performance on an ongoing basis and steer direction continuously based on that. Pretty exciting if you ask me.

     

Being a sales manager today is an impossible task. The future is bright though.

Posted by James Pember on 4/11/16 5:38 PM

I was watching a video from global consulting firm BTS the other day, and I was particularly struck by something that Lou Schachter said.

Managing sales teams in the era of #winning

Posted by James Pember on 4/4/16 8:50 AM

An MTV survey from 2011 noted that 60% of surveyed millennials thought that “#winning was the slogan of their generation. This statistic, whilst somewhat amusing is however highly relevant for sales leaders whose teams are increasingly made up for younger, millennial salespeople.

The importance of “fun” inside a sales environment

Posted by James Pember on 3/17/16 11:23 AM

If your sales organization is crushing it, but no one is enjoying themselves, if no one is laughing, if few people are having fun, you haven’t built a world class organization. You’ve built a sales factory and nothing more and that’s nothing to be proud of.” A Sales Guy

For sales teams, transparency is the new black

Posted by James Pember on 3/8/16 8:00 AM

I was reading a great article on TechCrunch the other day entitled, Digital Transformation Requires Total Organizational Commitment. It touched on people, digital change and how enterprises need to adapt to the changing business environment that technology has forced upon us.

What do sales reps get out of sales competitions?

Posted by James Pember on 2/16/16 9:27 AM

Sales competitions are one of the most commonly used tools for boosting engagement, motivation and of course our results inside our sales organisations. Competitions are effective because they tap into what really motivates our staff - competitive spirit, recognition and progress, and they create short-term spikes in focus and enthusiasm.

The difference between good and great salespeople

Posted by James Pember on 2/10/16 9:38 AM

I was part of a sales workshop / training event last night, hosted by Mikael Arndt, one of Sweden’s most popular speakers on sales - and his session last night on Goal Setting was fantastic.

Here's your template for dealing with underperforming sales reps

Posted by James Pember on 2/4/16 2:54 PM

This week I want to focus on underperforming sales reps, and what to do with those reps as a sales leader. I've also put together a free Word template that you can use straight away to build a Sales Performance Improvement Plan. 

Sales Coaching Is Broken - Here's Why

Posted by James Pember on 1/26/16 8:49 AM

Today I'm going to look at sales training, why it often fails to impact results and the 4 things you can do to improve your sales training, today.

"The Trophy Generation": Managing salespeople when everyone wants to win

Posted by James Pember on 1/18/16 1:53 PM

Today we’re going to take a closer look at motivating “millennials”, i.e. those born between 1980 and 2001, who are now starting to become a material part of our workforces. This generation of people are often referred to (somewhat critically I must add) as the “Trophy Generation”, so we’re going to look at the origins of that term and what it means for those of us managing sales teams.

What is “The Trophy Generation”?

“The Trophy Generation” is a somewhat derogatory term applied to the generation born between 1980 and 2001, other times referred to as Millennials.

The term touches on the “nice try, way to go, you’ll get it next time” style of parental encouragement that many children born between the aforementioned dates experienced, and hints at the fact that many people in that age group received trophies and awards just for participating, or “showing up”.

Opponents of “Trophy parenting” claim that this style of parenting has produced a generation that is entitled and always wondering “where the hell is my god damn trophy - I'm here aren't I?!” - and unable to function without constant feedback and recognition.

On the other hand, many feel that this style of encouragement has built a generation of risk-takers, free-thinkers and ambitious entrepreneurs who don’t just tow the line or accept the status-quo.

To save myself from moving into child-behavioral-psychology territory, quite simply an area I know far too little about, I’m going to focus this article on why this phenomena is important for sales leaders to be thinking about.

What is Sparta?

Sparta is an end-to-end sales performance solution that helps you coach, train and drive your team into higher performance.

Create sales competitions, set collabarative team targets and inspire your team to crush their goals! 

Click here to request a demo today.

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