The Unintended Consequences of Asking Salespeople To Try Harder
When "business as usual" is threatened by low sales numbers it is normal for companies to ask their salespeople to try harder.
And, generally speaking, salespeople do exactly that.
They make more calls, looking for more deals to put into the sales funnel. They conduct more demonstrations. They make more proposals. If the sales process is good, results may improve incrementally, though perhaps at significant expense.
If the sales process is bent, however, the results can be dangerous. Unfortunately, problems with the market or the sales process usually aren't obvious. So, sales managers, trying to get their people to work harder, become unwitting accomplices in a frustrating endeavor:
- They can demand more activity.
- They can demand more results.
This dichotomy creates waste, which is disastrous, though obviously unintended.
Demanding More Activity Produces Unwanted Surprises
When managers ask salespeople to generate more activity, salespeople generally go into compliance mode. They "fill the squares" of their checklists and reports to make the sales manager happy. ("Yup, I completed my 30 calls today, boss. Sorry the forecast doesn't look any better, but I can't work late tonight because I've got bowling league. See ya tomorrow.")
Here is a bizarre example I heard recently that further illustrates this point. The senior executive of a large software company observed that most prospects who went through the expensive "proof of concept" stage of their sales process became customers. So, he ordered a sales contest where salespeople were rewarded for getting more prospects to conduct a proof of concept.
Salespeople complied, and the results were disastrous: costs went way up, and revenues didn't. This person's assumptions about what caused customers to buy, created enormous waste (and may have had something to do with the company's sale to Oracle shortly after).
Activity management assumes:
- everyone already knows what the right activities are and how to do them correctly
- that doing more of these activities will improve your results
Activity management has no procedure for studying how to improve. Its focus is on doing more activities, not on analyzing activities in relation to results. If the process is good, it may incrementally increase sales, but costs and resources will go up at least commensurately. Otherwise, costs are likely to increase at a much higher rate.
Demanding Better Results Gets the Same Results
When managers put pressure on reps to create results, they act as though certain individuals have the "magic" and should be rewarded, while the rest can't, or aren't using it for some reason and so should be penalized. In practice, of course, it discourages successful people from helping others learn, lest their magic be diluted.
How To Conduct a Sales Kaizen Event
Guidebook Launch Teleconference
Dec 18, 2008, 3:00pm Eastern
Sales often have a reputation for bringing in business without regard to the costs involved. They assume profitability is the rest of the company's problem. Not only is this wasteful, it won't improve because results management has no procedure for studying how to improve, either.
Results management assumes
- all the causes of success are contained within the individual
- information about salespeople's activities can productively be used against them (causing them to be closed and defensive rather than open and curious)
Obviously people don't intend for this to happen, and some sales managers are skilled enough to minimize some of the negative consequences. Yet it still happens.
Don't Choose a Side. Pick a Different Coin Instead!
Activities vs. results are flip sides of the same management coin. Many companies go back and forth ... asking people to work harder at the same activities, or demanding more results (perhaps from different people).
Neither tactic deals with the real problem; which is "How do we generate more of the right customers, at higher margins and lower costs?"
Most people can sense they need a different approach - a different coin, if you will. If they were to describe it they might say they need an approach that:
- Enables people to improve (in the eyes of the customer) how they do their work. It needs to offer language and tools that encourage people to proactively study and improve themselves, as well as help others within their department
- Provides traceable evidence distinguishing what individuals and departments can control, versus what management can control. This means enabling people to study and improve the flow of leads, opportunities, and deals. For example, some things may be in the marketer's, or servicer's, control yet outside the sales department's control.
- Permits prototyping so new channels and methods of positioning, offering, and packaging things can be tested, analyzed, and validated
Many companies would agree they need such a management system, even though they have never seen it done.
Yet it can be done. It has been done. And your company can do it too.
This management "coin" is called kaizen. Companies who use kaizen in America have been successful over the long term: companies like Toyota, Honda, and many others.
If you are reading this, you probably know that kaizen is the name the Japanese gave to what they learned from Deming and Juran in the 1950s. It is consistent with Six Sigma and Lean, yet adds a critical element that is crucial in sales and marketing where these have not caught on. Kaizen is the management system that drives improvement through conversations about activities and results together. It uncovers new avenues of inquiry that produce short-term gains in sales and marketing results.
My associate, Robert Ferguson, and I have been literally slaving over the last two weeks to finish up the guidebook I promised to you in the teleconferences of Nov 4 and Dec 8.
That guidebook is called
"How to Conduct a Sales Kaizen Event to
Improve your Sales Process in a Way Your Customer Will Love"
We'll be conducting one last teleconference this year to launch this guidebook. In this teleconference, you'll learn
- How kaizen applies and why it is so appropriate for sales and marketing
- Typical sales and marketing problems, addressable by kaizen, and readily available fixes
- How to determine when kaizen is not the best choice
- How to use kaizen events to bring your team along one step at a time
- Examples where kaizen events have been successful and why they worked
The date of the teleconference has now been moved to Dec 18, 2008, at 3:00 PM Eastern. Frankly, we're excited by what we're coming up with. We hope you'll sign up now, because this is going to be good! (It will make a great read for any down time you might have around the holidays.)
Sign up now.