“Differentiation isn’t about corporate plots, secrecy or purges. It’s about building great teams and great companies through consistency, transparency and candor.” Jack Welch
We all talk about it. Most will say that relative evaluation is the route to building good successful teams.
Until the person is standing in front of you.
You know the person. You ate birthday cake with them. Exchanged holiday cards. Celebrated the birth of their 2nd child. Talked about dogs, cars, vacations….and now you have to judge them?
Bluebirds Land On the Good and the Mediocre
I wrote recently about a more humane way of handling the tactical sales inspection: https://goo.gl/S5JdQa. If we go down the path of treating people more humanely, why would we judge them? Isn’t everyone of value? True, everyone has value, just not the same value and not necessarily in the current context.
As any leader will tell you, it is important to apply your resources in a judicious way. Of course, this is easy. Just look at quota attainment, that’s it for sales people. Done. Finished. Nothing else to see here, move along folks.
So let’s talk about a real example.
- Sales rep is 225% of plan
- It was a profitable deal
- Sold a strategic product, i.e. something that moves the needle for the company goals above and beyond revenue
- Sold to a strategic account, a customer that was a target
- Defended from a formidable competitor
Well that was easy…But wait.
One deal sold to one account. 225% of plan. OK…. You saw a plan in Q1 for a long 9 month sales cycle that was tough and hard won. You didn’t? Q2 then? …No. It WAS forecasted right? Not till the PO came in. But you went to see the customer yourself didn’t you? Well no, was never asked and never knew about the pursuit or the deal till your financial analyst told you about it.
Oh hang on…. You remember this person now, no pipeline, no plan, very few sales calls (likes to eat lunch at this one steakhouse though). And now a closed deal that over achieves that quota by getting a call from the customer in the last few days of a budget cycle. Also there was a larger deal that the CEO was negotiating directly with your CEO. Oops…
To add insult to injury the deal came in at 11:45pm on the last day of the quarter. Frankly, the rep probably could have been replaced by a small dog with a note in its mouth and this deal would have come in anyway., The icing on the cake? You’re in front of the CFO and CEO next week to justify why anyone should be paid on the deal since no one from sales really did anything.
Awkward but as sales leaders we’ve all had something like this happen.
Perhaps this is an extreme example. The salient point remains that the rep carried the quota, likely didn’t get paid all year, and caught a lucky break. But that isn’t the discussion. You’ll do your best to get this person paid. But at 225% of quota, is this truly your best rep? Quota attainment rewards your good people, and lack of attainment is an indicator of a problem. Yet neither dictates whether a sales person is good or bad. A good and valuable sales rep can miss, and a bad rep can overachieve. So how do you define good or bad, and once the binary assessment is over, how to you rate relatively. What do you use when attainment really isn’t a good indicator of value of the individual?
Think Back to the Hiring Decision
The real trick I have found is you should evaluate people on the exact same criteria you used to hire them.
Hopefully you don’t hire sales people just because they have a list of impressive quotas on their resume. After all, even when you do a good job of checking references, quota attainment is largely self-reported. When did you ever talk to a reference that told you NOT to hire the person?
Sales people have to be personable but is likeability a good reason to hire someone. They need to be liked by their customers. People buy from people they like, or so they say. Should like-ability be the only reason you hired them? Unfortunately, not only is it the reason people hire, it’s why they promote and keep around people who should be gone.
In 2008, I co-hosted a “High Achievers Club” trip. There were 17 people who had made at least 115% of quota. By the summer of 2009, 12 of the 17 had either left or were fired for under performance. In that time period, the economy imploded. Being likeable was still a useful trait, but if it was ALL you had, you failed. When you’d been to a CIO’s house on Sunday for a barbecue celebrating their child’s birthday, what did you say on Monday when the CIO said “I don’t have budget anymore for your product”?
Developing a Success Profile
I’m not suggesting you should not use likeability or quota attainment. Instead, you need a profile of success for hiring? Have you looked at the job you want done and really figured out what it will take to achieve the company goal? Are you a startup who is less interested in profitable sales but more interested in market and mind share? Are you a mature business looking to expand? Are you a successful business that needs to fend off some competitive upstarts or a disruptive force in the market place? Hint: Is the Cloud keeping you up at night?
Start by defining the traits you think you want. Make sure those traits are measureable and will result in the type of sales you’re expecting. Likeability is hard to measure. It may be viewed as insincere and a liability with respect to today’s set of economic buyers. It’s all too easy to think about these data points as metrics of behavior. You need to define the behaviors and define the metrics you’ll use to assess execution of those behaviors that result in sales.
Building a large Rolodex, figuratively not literally, is a step on the path, not the end game. Monetizing those contacts is important and expectations need to be defined.
Now you have the list of criteria needed to be successful: hire to it, fire from it and use it to relatively evaluate your teams.
With the criteria defined, and the values are measured, you can line up your team top to bottom. Doesn’t always mean that the bottom 20% are gone, but it gives you a great insight into defining why you need them.
Good Luck and Good Selling.
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