Thursday, March 18, 2010

How the C-Level Makes or Breaks Sales Performance

Sales performance is at its lowest in years. When thinking about remedies, the first thought usually goes towards initiatives, mostly in the form of training,  focused on sales people helping them to increase their performance in this 'new normal' that seems to emerge.

The 'new normal'
Undoubtedly, sales people need to adapt their skills to this 'new normal'. One of the key characteristics of this new era is that people are much more concerned about spending their money wisely. With respect to traditional sales performance improvement initiatives, this poses though a major problem. Many of those initiatives, often in the form of outsourced training, have not delivered the desired results in the past. How can we increase the likelihood that new urgently needed sales performance initiatives, have a more sustainable effect; even though budgets are tighter than ever. My proposal is to first look at how the C-level ( e.g. Chief Executive Officer, Chief Operations Officer, Chief Sales Officer) impacts sales effectiveness.

The C-level's impact
Many executives on the C-level are not consciously aware of how they impact sales performance. Others have a misconception about the role they play in the sales process. Studies show that, for example, a high percentage of C-level executives consider themselves knowledgeable about the customers of their company. The percentage of field sales people, confirming this perception, is though very much lower. The same pattern emerges when looking at the question how the C-level is involved in the sales process. Again executives rate their involvement much higher than it is perceived by the field.

As a matter of fact, it is probably more likely that fundamentally, C-level executives have a hands off attitude towards sales. Many are guided by the principle “I just care about the revenue, it is sales's job to figure out how to make it”. Yet in contrast to this general attitude, the same executives start to show behavior of micro management when it comes to large deals. This is why they think they are involved in the sales process. Their understandable concern whether the deal can be booked still in a given quarter is perceived by the field that only the numbers count. This behavior goes to the detriment of the sustainability of sales effectiveness initiatives. It is the expression that an outcome based sales force control system is prevailing. Sales effectiveness is however improved by changing behavior. To track and reinforce the behavior change, a behavior based sales force control system is needed. As the companies quarterly figures might though depend on this large deal to close, executives towards the end of the quarter, tend to see the situation as a crises and revert to a command and control management approach. Behavior based sales force control systems though are based on a coaching approach. Fear about not making the number lets executives ignore evidence that others, using behavioral based sales force control systems, are experiencing better and more sustainable outcomes.

What does it have to do with sales performance?
Not only does this focus on large deals shed some doubt on a company's ability to produce sustainable revenue streams if every quarter, their results depend on these big deals. This management approach certainly goes to the detriment of the sustainability of any sales effectiveness initiative. Paradoxically, when you talk to executives, they are often telling you that they are convinced about the need and the usefulness of sales people being coached by their managers. They sometimes even show disappointment about the little coaching managers provide to their sale people.

Managers often are not doing enough coaching because they have never been trained in coaching. Providing training on coaching for sales managers can though just increase the misalignment. There is therefore a high likelihood that the training will not show any sustainable effects. 
 
Where to start a sales performance improvement initiative?
Managers are faced with a constant struggle to balance the people focus (coaching, sustainability) with the business focus (urgency, short term). How can one expect a 'coaching initiative' to fall on fertile ground if the executive level continues to inspect just revenue. For such an initiative having a sustainable effect, a mind shift at the executive level is needed . Executives should recognize their duty to consciously supporting the managers in finding that balance between people orientation and business orientation. This should not be too hard in principal. Successful executives have learned to think in 'and' concept, rather than in 'either or'. How will such a mind shift become evident? When they start inspecting people related parameters besides revenue. It could well be that executives might need help achieving this mind shift and learning what to inspect. Money spent on this help has certainly the highest leverage effect compared to just pouring money into the next sales effectiveness initiative on the individual contributors level.

Should you be interested in knowing more about the impact of the C-level on sales performance and what to do about it, you can follow this link,

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