Leading or Lagging?
Interestingly, very few top performers whom we’ve worked with over the years spend much time looking at quotas or traditional sales funnel pictures as reported by sales-force automation packages. For example, most top performers view a quota as a lagging indicator: it can tell you whether you made your quota last period, not whether you will make your quota next period. Think of lagging indicators as great rearview mirrors: they aren’t very good at telling you what’s up ahead.
Top performers usually know well in advance if they will make their quota or not. Many develop and use personal tracking measures to better predict their results. These private tracking systems are more like a built-in navigation system than a rearview mirror. They let the user know what’s up ahead, where to turn, and how close they are to their destination. Think about the top performers you know or have worked with. Most of them probably have some kind of personal spreadsheet they use to track their deal flow. Those personal spreadsheets are based on their own set of leading indicators. Their spreadsheets document their tricks of the trade that unfortunately don’t fit neatly into sales systems or reports. But they are extremely useful and valid predictors of the timing and value of the business they will close.
One interesting aspect of leading vs. lagging indicators is when top performers choose to move something from their private list to the formal sales reporting mechanism. That choice is based on factors that are usually well understood by the top performers but not at all understood by average performers. But these factors are not mysteries; they can be uncovered and understood. When understood, they can be leveraged to close the gap between top and average performers.
Questions to consider
- Are you using mostly leading or mostly lagging indicators?
- What is your level of understanding about the leading indicators used by your top salespeople?
Customer Service or Customer Delight?
The following story is based on an actual experience. Some of the details have been simplified, but the customer service rep and her reaction to the customer request are real.
The call was fairly routine. The customer wanted to know how to return something. She had bought a fly-fishing kit as a gift for a nephew who was planning a fishing trip to Florida, but the kit she purchased just wouldn’t work.
“Why not, may I ask?” the customer service rep inquired.
The customer laughed and explained that her nephew was planning a tarpon fishing trip. Tarpon are quite large and challenging to catch, so tarpon fishing requires heavy-duty fishing gear. But instead, the customer had bought a lightweight trout fishing kit designed for use on small rivers. “If I fished myself,” the customer said, “I would have understood the difference and bought the right thing in the first place.” As it was, she would have to deal with the hassle of returning the first fishing kit and purchasing a new one. “I just hope I can get it all sorted out before my nephew leaves on his fishing trip.”
The rep apologized to the customer: “I’m sorry for our mistake.”
“No,” the customer exclaimed, “I made the mistake. I bought the wrong thing. You shipped exactly what I ordered.”
“No,” the rep explained, “it was our mistake. We didn’t ask enough questions to help you pick the right gift for your nephew. It turns out that we carry a fly-fishing kit specifically designed for saltwater game fish like tarpon. I’ve taken the liberty of placing an order for that one. We still have your nephew’s address on file. So I’m having the new kit overnighted to him, so he’ll have it in time for his trip. There’s no charge for the overnight shipping. And when your nephew gets the new kit, simply use the return shipping label in the package to return the other fishing kit to us. And tell him to please send along a picture of a big tarpon!”
Questions to consider
- If you were the customer, how would you react to the rep’s response?
- If you were the rep’s supervisor, how would you coach the rep if you observed this call?
photo credit: customer service assistant on phone via photopin (license)
A powerful myth is at work in the sales field today: the Myth of Sameness. This myth says that all the people in the sales force are about the same. They have the same skills, knowledge, motivations, and desires as each other, and they function as a monolith.
According to the Myth of Sameness, any difference in sales results is assumed to be because someone works harder, is more motivated, or follows orders more closely or sometimes because one performer has a “better” personality than his or her colleagues. The Myth of Sameness is a powerful force, but it’s dangerous and it’s wrong!
An analytical look at most sales organizations shows a lack of sameness. In fact, the performance of the people in most sales organizations is distributed across a spectrum that typically takes the form of a normal distribution curve.
Some performers are doing great. We’ll call them the top performers. Some are barely meeting the minimum expectations to stay in the organization. And the great majority are clustered in the average or good performance range.
It is important to understand the size of the gap between the top and average performers. This is where the Myth of Sameness starts to breaks down.
Though sales leaders have a general sense that their top and average people are different, few have stopped to put numbers on those differences. Fewer still have analyzed the numbers to determine the real cost to the organization. Beginning with McKinsey’s talent studies in 1997 and in 2001 and continuing through our own work there are discernable differences that point to a huge performance gap between the best (A) and average (B) performers:
A 2001 study by McKinsey, which formed the basis for the book, entitled “The War for Talent” shows:
- A players on average grew revenue by nearly 50 percent.
- B players showed little or no ability to grow revenue.
This type of data is consistent in our work with sales teams across various industries. To put it bluntly, A players drive the organization, C players hurt the organization, and B players, despite their best efforts, are just along for the ride. So the old adage that a sales organization should routinely get rid of the bottom performers is true. But a new and much more impactful motto is that organizations must move B performers up to A-level performance if they want to see any meaningful positive impact.
Even when recognized, this type of disparity often results in Band-Aid fixes, or worse yet, the gap between top and average performers is just accepted as the status quo. Instead, the situation requires focused action to close that performance gap.
Questions to consider
- What is the performance distribution of your sales force?
- How much time and energy are you devoting to improving the performance of your average or good salespeople?
photo credit: More of the Same via photopin (license)
Outcomes Thinking Blog: Introduction
Welcome! The theme of our discussions here will be how to achieve better business results by improving the performance of people working on the front lines. Our topics will center on Outcomes Thinking, including general concepts, tips and techniques, and case studies.
We invite you to join the discussion. Your thoughts and questions are appreciated!