performance metrics

When Accountability Is Elusive

by Karen Jackson | on Feb 02, 2016 | 5 Comments

Even the most casual sport fan heard about the recent firing of Cleveland Cavaliers’ head coach David Blatt. The move was a big surprise given the Cavs’ standing at the top of the Eastern Conference Central Division. In an awkward and rather opaque TV interview the following evening, Cavs general manager David Griffin stated, “We need to be accountable to one another.”

Accountability. Most would agree it’s worth striving for, if not outright demanding it. Yet accountability is elusive in too many organizations, despite the common understanding that it’s a virtue. Why is that so? I can’t speak to professional sports teams, though ego and outsized pay checks are surely factors. But for companies, these are the most frequent reasons I observe that make accountability difficult to master.

  • Accountability is not a core value.  Successful companies articulate their core values in such a way that one can visualize and distinguish precisely what these values look like in the context of their workplace. Values provide guard rails for behavior and a common language to guide internal and external interaction, hiring, firing and rewards. When accountability is not elucidated in a company’s core values, it is no longer obligatory. Rather, it becomes simply an ideal that no one is on the hook for. Integrity is accountability’s close relative: doing what you said you would do, when you said you would do it, to the best of your ability.
  • Too few employees have defined roles, goals, or metrics to measure success.   Accountability is amorphous because we too rarely tell people precisely what is  expected of them and what success looks like. Job descriptions, measurable goals, key performance metrics – these are the constructs for accountability that remove subjectivity. The chasm between many managers and employees is interesting. The former agonize, “I pay them well; they should know what to do” as if their employees read minds. The latter bemoan, “I have no idea what they want from me, what my priorities are, what success looks like.”     When responding to my Organizational Health questionnaire, on a scale of 1 to 5, most companies I begin work with have an average score of under 2.7 on the question, “I understand my accountabilities and have metrics to measure progress.”Sales reps are typically accountable in the form of that thing we call quota, yet a revenue number by itself is insufficient. They are at risk of missing their numbers because they rarely understand the sub-set of accountabilities that, if met, will get them to that goal. As a result, the annual quota is a number they’ve no confidence in attaining, nor can management count on.
  • Top producers are exempt.  Among the rumors surrounding the firing of Cleveland’s coach was that Blatt didn’t hold LeBron James, the team’s #1 player by far, accountable. This exemption for top producers exists in many companies. The thesis that a top producer is too valuable to lose – “We can’t make him; he’ll quit” – causes leaders and managers to look the other way when that individual doesn’t live up to her obligations or selectively follows the rules. This is particularly true when it comes to behavioral accountabilities. Selective exemption is a culture wrecking phenomenon that leads to pernicious results: poorly functioning teams, process breakdowns, low morale, apathy, and a blame vs. solve world view – certainly not the stuff of high functioning organizations.
  • The C-suite doesn’t lead by example.  Modeling accountability is essential if we want our employees to follow suit. We must demonstrate that it’s an organizational covenant, irrespective of one’s place on the org chart. Last week, I facilitated a cross-functional project meeting for a client. Everyone had an assignment to complete in advance. The managing partner arrived – late no less – without having completed his assignment. He had allowed ad hoc work and interruptions to take precedent over his commitment to the team. “Sorry, it was a super busy week” was met by a “you have to be kidding me” look in everyone’s eyes. As if their weeks hadn’t been busy, too. Afterward, people expressed resignation. “Same old story; he says he wants change but it’s BS.” Unspoken, but in the air, was the sentiment that people weren’t going to do the heavy lifting for a boss that wasn’t willing to do it along with them. They are destined to maintain the status quo, instead of realizing growth, if it continues to happen

Accountability is elusive. We all know it’s a good thing, but too often we avoid the hard work required to institutionalize it. It’s simple – not always easy – to solve:

  • Make accountability a core value
  • Qualify and quantify what it looks like
  • Allow for no exemptions
  • Model the behavior

What do you think? What other elements are at play that make accountability elusive? Please share the ways that you’ve successfully institutionalized accountability in your organization. Missteps and blunders are instructive, too.

 

 

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The Simplest Way to a Forecast You Can Trust

by Karen Jackson | on Feb 19, 2013 | 8 Comments

When I work with B2B sales teams struggling with profitable revenue growth, there’s always one person seemingly outside the biz dev process who wants in on the conversation: the CFO. Inevitably I get asked for a few minutes in private, and when the door is closed, s/he’ll plead, “what can you do to get me a forecast I can trust?”

Great question, particularly for companies with complex products / services and long sales cycles. In small to mid-size B2B companies, so much gets done on an ad hoc basis within the sales organization that forecasting deal closure is way less about reality and way more about emotion, ego, politics and culture. For example, in some companies it’s better for a sales rep to project they’ll close a deal than to admit its improbability; in others, it’s better to sandbag and then have pleasant surprises.  Under either scenario, missed forecasts wreak havoc on a company’s health and future.

There is a simple way to creating a forecast you can trust. Follow these four key steps:

1)      Identify each stage of your sales process and the milestones completing each stage that tell you when you’ve moved to the next

2)      Estimate the average length (in days) of each stage of the process

3)      Approximate the average percent of deals that close at each stage of your process (i.e, deals that make it to Stage 3 have a 60% likelihood of closure)

4)      Hang every deal in your pipeline on a weighted forecast spreadsheet that maps the dollar value of the opportunity to its stage, and therefore to its probability of, and date until, close.

The results will be eye-popping. And that’s a good thing, even if what you learn about your pipeline isn’t. Because that’s when the fixing can begin.

Many resist the exercise because they lack data to tackle these steps with precision. Many resist for fear of what they’ll learn. Don’t let either stop you. Yes, I’d prefer you have a CRM. Yes, I’d prefer you have hard, accurate data. Yes, I understand you haven’t yet created a culture of accountability around these metrics. Like many things in life, it can be hard to pick a place to start. But, the truth is, there is plenty of anecdotal, historical information in the organization that will get you close enough to create your first forecast based on reality vs. a crystal ball. I’m not suggesting there isn’t both art and science to sales, but the more we avoid the science, the harder it is to do good art.

Ultimately, the true value is in identifying the underlying problems in your revenue engine. You’ll begin figuring out answers to the thorny problems like:

  • Where in the process do we fail most often? (Failing early vs. failing late helps diagnose what we need to repair.)
  • Where are the opportunities to increase our sales velocity?
  • What accountability metrics directly impact accomplishing our goals?
  • How might we better qualify opportunities throughout the sales cycle to increase close ratios?

Tackling those questions leads to refining your process which leads to a tightened forecast. Your best sales reps will be elated; they’ll see clearly where / how they should spend their time, and they’ll get straight to the fix. Your mediocre reps will squirm, a solid indicator that it’s time for them to seek other employment. Your head of sales can shift from task management to coaching. And, your CFO will actually crack a smile.

If you need some help thinking about how to apply this to your business, please ping me at karen@jacksonsolutions.com.  As always, I appreciate any additions to this conversation with your comments, insights, suggestions.

Here’s to a forecast you can trust.

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Scoring From The Red Zone (Or, Why Can’t We Close?)

by Karen Jackson | on Nov 15, 2012 | 6 Comments

I’m hearing a persistent lament from B2B CEO’s. Their sales reps aren’t closing deals. They’re not talking about a lack of deals in the pipeline; they’re talking about the deals they’d forecast to close, but then died. Often they lost to the competition; just as often they lost to the status quo, that all-too-common state where the prospect decides to stick with their current situation and not purchase at all. Like an NFL football team that can’t score from the red zone, the rep couldn’t close the deal.

The CEO’s frustration is palpable and rightly so. Naturally the finger-pointing is squarely aimed at the reps. “Do they have the skills to close? Are they working hard enough? Do we have the right people on this team?” The answers are unknowable – equally important, unsolvable –because the root causes of the problem are hidden from view.

Thanks to years of conducting deal post-mortems, I’ve discovered common mistakes that impact a rep’s ability to close deals from the red zone. Yes, sometimes it is lack of effort, skill, or the inability to “wear well” with their prospects. (The latter point is not to be underestimated; many customers say their experience with the sales person was as important to their decision as the product or service.) More often, the deal didn’t close because it was never going to close. Its forecast was wishful thinking; the deal was lost long before the actual purchase decision. Here are the most common reasons why I see get reps blindsided:

  • It was never an opportunity in the first place – it was merely a lead
  • The rep failed to continuously qualify & gain commitment at each step of the sales cycle
  • The prospect didn’t trust the rep’s ability to deliver on the promised outcome
  • Engagement and commitment from the true buyer(s) was never gained
  • The rep didn’t understand the buyer’s perception of risk
  • The prospect’s real needs were never uncovered or resolved

The common denominator for companies that experience these problems regularly?  Lack of sales process. CEO’s would never consider running their operations and financials without process, but astonishingly few establish process for their sales reps. Sales process makes it possible to identify a check list of strategies, tasks and milestones that, when accomplished, significantly reduce these common mistakes. Process creates a series of interim “closes” such that when the client is actually at the final decision point it’s a natural conclusion to say “yes.”

With process in place, there are far fewer:

  • poor leads chased & wrongly forecast to close
  • assumptions left un- validated
  • risks misunderstood and unmitigated
  • ghost stakeholders with unmet needs
  • last minute selection criteria to sabotage the deal

Do a post-mortem on your deals that died in the red zone. Did your team make any of these common mistakes? If so, get serious about implementing sales process. It will allow you to diagnose your deals throughout the cycle, make the necessary adjustments and increase your close ratio. You won’t win them all, but you’ll win a lot more. And with solid data in hand, you can now answer the original questions about the skills and commitment of your reps.

What other mistakes do you see that sabotage the close? Have you implemented sales process? Did your close ratio go up? Please share your experiences for others to learn from.

If you found this post helpful, read my previous blog post “Surprising Reasons Why Sales Process Matters” for other ways that sales process can positively impact your sales results.

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When Do You Let Your New Rep Go?

by Karen Jackson | on Oct 08, 2012 | 4 Comments

Raise your hand if you’ve ever kept an underperforming salesperson for too long. Someone you hired that joined the company with all the promise in the world, whose resume was first rate, track-record verifiable, references stellar. Their attitude was excellent, they showed up on time, appeared loyal, and were enjoyable to have around. But then they didn’t perform, and the months turned to quarters. And you kept hoping and wringing your hands simultaneously. There was gnashing of the teeth; passive-aggressive behavior kicked-in as you got angry, but none of that improved performance. Yet you kept them nonetheless, waiting for the proverbial corner to be turned, believing it would happen soon. And the sales person assured you it would, but it didn’t. Yet, there they were, still on the payroll.

If you’re in the majority who has experienced this debacle (or witnessed it in your organization) see if you can answer this question: “Why did I wait so long to let them go?”

The three answers I hear most frequently from sales managers are:

  • They always seemed to have a deal on the table so I just had to give them a little more time to close
  • The idea of starting the hiring process over again was exhausting
  • I couldn’t afford to have their territory uncovered

Pushed to think about it more deeply, most managers agree that the true reason they hung on so long was they didn’t really know how to measure the salesperson’s success. Were they really making progress? Did their promises hold water? Was the deal really imminent? And in the absence of good measurements, the decision became subjective instead of objective, dangerous ground for making hiring and firing decisions. So the rep stayed in the seat, and it cost the company. Not just in rep compensation (please don’t tell me you reduced comp as a solution), but in opportunity cost, wasted resources throughout the organization and less obvious, but equally damaging, team morale. (I’ll say more in a future post on the team impact when others see you keeping an underperformer. Hint: reduced morale and respect for the leader.)

With short, transactional sales cycles it’s easy to measure rep performance based on revenue. But in the B2B space, particularly in complex, enterprise environments, the sales cycle can take 18 months or more before booking revenue. Using revenue as the sole measure in that scenario is foolish. There must be a way to determine within 60 – 90 days of hire whether a rep can be successful in your company or not.

So, what’s the solution? It’s not magic; it’s process and metrics. It’s creating certainty instead of wishful thinking. Here’s where to start:

  • Identify your sales process, creating quantifiable milestones for each stage
  • Create measurable productivity goals, tied to your process, for the first 90 days of employment
  • Create a coaching program for the new rep with measurable activities each week

Note that each item has a measurement in it. The first, identifying sales process, ensures you know the KPI’s of your sales cycle. The second ties the rep directly to those KPI’s. The third identifies specific weekly activity metrics, but just as important, ensures you are training and having what I like to refer to as “sales conversations,” meaning conversations around strategies and tactics that advance the sale.

These are not babysitting techniques, and they’re not just for newbie sales reps, though obviously the complexity of the metrics will adjust to the experience of the rep.  These are realistic, quantifiable activities that you know, if followed, will result in closing a sale. By identifying the appropriate measurements, you can define an accountability framework for the new salesperson. Once established, you create certainty both for the rep and for yourself. It will become easy to identify whether the individual is doing what they said they would do, where they need support, what problems they are experiencing, what obstacles block their path, what training they require. Whether they’ll make it.

Follow this strategy and you’ll never again retain an underperforming salesperson.

Please weigh in. Have you ever kept a salesperson on board too long? What lessons did you learn? What measures did you install to ensure it doesn’t happen again?

 

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Keys to Hiring Great Sales Talent

by Karen Jackson | on Mar 21, 2012 | 6 Comments

Small business owners frequently lament about their difficulty in hiring great sales talent. It’s not easy to do, in part because a sales person is likeable, easy to be with, and their interview is probably their best sales job. Most small business CEO’s don’t have sales roots themselves, making it harder to know what they’re looking for and how to probe. continue reading »

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