How to Manage Sales Performance Change

In my business I deal with this almost daily. Either a sales person or an entire organization is not performing up to requirements and change has to take place. When I was a new sales manager, and I consider this to be the first five or so years, I tended to approach these problems with more or less brute force. There is a sales methodology in place and I needed to enforce it. I had several years of sales and sales management experience and that experience taught me to go back to the basics and build upward. In time I finally noticed that the irregular results I was achieving while managing change was stressful to me and unacceptable to the organization. Typically a new sales manager brings their bag of tricks and when they run out they move on to the next job. So, I started to look for a better way. I needed to understand how to implement sustainable change.

There are several high brow concepts that need to be understood to effectively manage sustainable change in any organization and this is especially true with sales. The first concept is Gleicher’s Formula for Change. All of these are found in psychology textbooks, but still have relevant practical use. Basically Gleicher states that the discomfort level that exists, times the vision of how things could be better, times a finite plan to make it happen, has to be greater that the resistance to change for change to effectively take place.

D * V * F > R

The second is the concept of Psychosclerosis and Homeostasis both developed by Abraham Maslow. Genetically we do not embrace change at the subconscious level. We dig in our heels and prefer to stay the way we are. Johannes Schultz developed the theory of Autogenic Conditioning around this concept. The last concept revolves around the Reticular Activating System (RAS). That is the part of the brain that is constantly filtering information for the subconscious.

This is a lot of book learning just to attack a simple problem of getting someone to perform at a higher level. But to sustain change over time these concepts have to be understood and applied. Now this is enough material for a book, so a blog will not give it justice. The one sentence answer is this:

The person or system that must be changed must be able to visualize the benefit of change at a subconscious level, and they must understand a clear plan to implement lasting change to embrace that change will happen. Then there must be a repeatable reinforcement methodology in place to overcome the natural desire to stay the way we are.

There are as many ways to accomplish this as there are personalities. Experience managers know how to connect the dots in a lasting and meaningful way. Less experienced managers will go through their bag of tricks until they are no longer effective and then they move on. Never really understanding why change is not permanent.

Human beings, by changing the inner attitudes of their minds, can change the outer aspects of their lives. William James (1842 - 1910)

Driving Mechanisms and Critical Events

This subject has come up a lot lately. It’s interesting how many people in sales don’t understand this very simple concept. If there isn’t a change agent going on in the business, change will not happen. If this change is not tied to a drop dead date, it will not happen in a predictable timeframe. When you say it out loud is sounds intuitive. When I talk with clients and they are lamenting about long sales cycles, unpredictable forecasts and why their sales people can’t close business, my first thought goes to these two concepts. Let me explain further….

Almost every professional sales person has now figured out that they have to solve a business problem to stand a chance of closing the deal. They understand that uncovering and validating the pain is important, if not critical. The top echelon even goes as far as to have the prospect validate the value of the pain in their own words. They get the solution to belong to the prospect by having them articulate the need and the value to themselves of meeting that need. Mike Bosworth in “Solution Selling, Creating Buyers in Difficult Selling Markets (McGraw-Hill 1994) defines a prospect as a buyer who has admitted a problem. So you understand the buying process, you are dealing with the decision maker, they have a budget allocated, you have not only uncovered the business pain, you have gotten the buyer to admit to it and put a value on it. Deal closed, right!

Why is the deal still in the pipeline three months from now? How do you overcome objections when there aren’t any? The checks in the mail.

The reason is there are no driving mechanisms and/or critical events to cause the decision to be implemented. Your prospect, the CFO or the VP of Purchasing has never processed the paper because there are other pressing issues or no issues at all. In James Clavell book “Shogun” (Cornet Books 1975), Lord Toranaga constantly reinforces to Blackthorne that no decision should be made until it has to be made. The driving mechanism might be a face-off with his arch-rival, but there is no attack; therefore no critical event. The same is with sales. There must be a driving mechanism such as a reorganization, critical financial crisis, or new business process. Something which causes the potential buyer to consider alternatives to what they are doing today. This is what got you to the presentation and the proposal, but it won’t close the deal. Too many times we get this far and assume the deal will now close.

This is where understanding the critical event becomes extremely important. If I am going to forecast this sale, I had better understand when and why it’s going to close. If my solution is part of a process required to achieve a goal, I need to work backward from the launch or introduction date of the new process to create my critical event. “If we cannot start implementation by next week, we cannot make the launch date of May 17^th.” “If your new plant is scheduled to go into production on July 1^st, then we need to….now”

If they want to improve your AR process or their sales process, but haven’t actually committed to when they must accomplish it, then I can’t forecast the close date on my deal. If they want things to be better, but don’t have a time line for making them better, then I can’t predict when they will buy, if ever.

Even when the pain is real and the cost of the solution is less than the problem, without something driving the buyer to implement the solution, there is no deal. This is why opportunities linger in the pipeline for months and then fad away…..

My Biggest Rant

This is a business blog. The concept is to present ideas that would help business people improve both their businesses and themselves. Over the past few weeks I have been bombarded with social issues that just scream for comment. The underlying dismay voiced by most of these self proclaimed pundits is that the United States has serious problems and someone needs to step up and solve them. That someone typically isn’t the writer. What are some of the issues?

1. The United States Ranks 96^th out of 140 countries on the Global Peace Index according annual survey commissioned by Britain’s Economic intelligence Unit. (Great Britain is 49^th ). Two of the major factors are the highest number of homicides per 100,000 citizens and the fact that we have the highest incarceration rate of all the countries surveyed.
2. Gas prices are at an all time high at almost $4.00 per gallon. Gas is $8.35 in Great Britain and more than $6.50 in most of Europe, according to AA Motoring Trust, when our gas prices were still at $2.87. Whereas we consume 1.6 gallons per day per person as opposed to most of Europe at .5 gallons per day per person (Economist View )
3. The U.S. economy is on everyones agenda. The unemployment rate has hovered between 4.5% and 5.2% since 2005 according to the US Department of Labor. The Consumer Price Index, less food, has been constant since prior to 2004. With the increase in gas prices and the fact that most food is transportation sensitive the CPI including food has risen significantly. A Gallup Poll suggests that 85% of the population thinks economic conditions are getting worse.
4. The Dow Jones Index has risen from a low of 8235 in September of 2001 to 12823 today. That’s a 55% increase in six plus years. A dollar invested in 2001 would be worth $1.55 today. Real average earning during that same period grew from $497.35 per month to $607.49. That’s a growth of 22%. Factoring for inflation the earnings growth was only 2.3% from 2001. So the stock market is outracing real earnings.
5. Household debt is 133.7% of household disposable income in 4^th quarter 2007. Households spent 14.3% of disposable income to service debt in 2007 compared to 13.0% in 2001.

What’s the underlying business concept to all of this? It’s responsibility. The problems we are facing are problems we can deal with on an individual basis. If, and it’s an incredibly big IF in an entitlement culture, we all take responsibility for our part of the problem, it solves itself.

Number one on the list is dismal. Twice as many citizens were killed in the state of California during the duration of the Iraq war then were killed in that war. Several points scream out to me…

1. This is just one state in our union. The needless death toll in our own back yard is staggering.
2. These people neither volunteered, were skillfully trained, nor took an oath to die, they just got up in the morning thinking they would make it through another day and didn’t.
3. There is no outrage from the public like there is for the war. We have come to believe this is acceptable.

I visit prisons every year. We can’t afford to continue to build prisons at the rate we are currently building them. Something has to change. I suspect the real reason is that we don’t expose this like the war, is we might feel somehow responsible for not doing our part. Because it happens all around us, we might be asked to actually take action to prevent it. The war is a long ways away and we can’t possible impact the outcome, so we vent and rage for someone else to take action.

The problem with rising gas prices is not a matter of the government reducing taxes, but modification in our social norms. Not an easy task to accomplish. We are Americans and the constitution says we can have and do anything we like as long as it doesn’t impinge of the freedom of others. So I want to drive a big car anytime and anywhere I want and the government is responsible for assuring I can continue to do this. Capitalism is great as long as I get what I want at the price I want. If not, the government needs to step in and mandate my happiness. This is just self-center goofy thinking. Only desperate times will change this. It’s an unfortunate aspect of human nature. We have lived the high life so long we expect it to last forever without our sacrifice. As China and India continue to grow their economies, this problem will continue to grow. It’s not a matter of our government solving this. Free enterprise and right thinking by the general public will solve it, if we choose. If not we will be doomed to second class status in the world economy.

The last starts with the very basic premise of spending less, investing more. If we take control of our spending and invest the difference two things happen. First we capture back 14% of our disposable income used for servicing debt. Second our investments grow faster than real earnings. As individuals we have more. More importantly we invest in businesses that provide jobs and stimulate the economy. Unemployment goes down, employee demand goes up, wages rise, we invest more and the cycle continues.

It's all about individual responsibility. Something we have total control over.

How do you catch wild pigs?

There was a Chemistry professor in a large college that had some exchange students in the class. One day while the class was in the lab the Prof noticed one young man (exchange student) who kept rubbing his back, and stretching as if his back hurt. The professor asked the young man what was the matter. The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his country's government and install a new communist government.

In the midst of his story he looked at the professor and asked a strange question.

He asked, 'Do you know how to catch wild pigs?'

The professor thought it was a joke and asked for the punch line. The young man said this was no joke. 'You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come every day to eat the free corn. When they are used to coming every day, you put a fence down one side of the place where they are used to coming. When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. They get used to that and start to eat again. You continue until you have all four sides of the fence up with a gate in the last side. The pigs, which are used to the free corn, start to come through the gate to eat; you slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught. Soon they go back to eating the free corn. They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity. The young man then told the professor that is exactly what he sees happening to America.

There is a lot to be said concerning government entitlement programs, not all of it is bad. But I want to address the entitlement programs in our lives, the ones that we create for our own benefit. They are the short cuts in our lives that at the time seem expedient, but later sap us of the drive end energy to push through much harder issues.

In college I took four semesters of calculus. Four mind numbing semesters of proving theorems that were printed in the back of our CRC. It was a slow and repetitive process that didn’t seem to have a goal other than to make us work harder. Once I got to Differential Equations and Applied Differential Equations I understood why. This process of proving what had already been proven provided me with the framework to analyze much more complex ideas. The hard work in the beginning prepared me for the work ahead. I could validate amazing concepts that previously seemed impossible to comprehend. (Calculating the center of mass of an irregular object) Many students never got to “Diffy Q” to see the fruits of their labor.

How many times are we so busy multitasking that we lose the lessons that eventually imprisons us in mediocrity? We are looking for a free lunch thinking that it will always be free. The problem is that it will be free as long as you never want to be more than you are. We slowly lose our ability to think outside the box. Psychosclerosis sets in. We become so convinced that new ideas won’t work, that we lose the ability to move forward and grow. We start to love the fences around us. They bring us comfort. We start to believe we will always be able to provide for ourselves and our families using only the skills, talents and knowledge we presently have. We can somehow start to coast to the finish line. I see this happening to younger and younger generations

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Continually strive to stretch your imagination and knowledge. Go through the pain and sometimes boredom required to grow. Never stop. It will pay tremendous dividends for years to come.

"A government big enough to give you everything you want, is big enough to take away everything you have." - Thomas Jefferson

Enduring Greatness

Jim Collins is still one of my favorite authors. He has this die hard, never say quit, damn the torpedoes, full speed ahead, attitude about success. In his latest article for Fortune Magazine “The Secret of Enduring Greatness”, he again states his case for greatness. ….The best corporate leaders never point out the window to blame external conditions; they look in the mirror and say, "We are responsible for our results!"….

We ARE responsible for our results. Whether those results are for individual behavior or corporate performance, we are responsible. One common denominator of those who never achieve their potential it is lack of personal responsibility, the belief that others have more control over our personal performance than we ourselves do. I could point to countless examples of this in society. In almost every case there is a price to be paid. In the end the price is far greater than the original cost of just taking responsibility and making something happen.

In the face of uncertainty, punt. Uncertainty creates stress. Stress hurts. So we hide from the source of that stress by assuring ourselves that there is nothing more we could have done. It’s just not our fault. If only this had happened or that had happened it would have all turned out differently. If only the government had adopted this policy or that policy it would have turned out differently. If our employees had performed better, if our customers weren’t so demanding, if the competition had been honest, it would have turned out differently. There is a never ending supply of excuses.

It was once said it is not how many times you are knocked down, it is how many times you get back up. Life was never meant to be a smooth road. We get stronger through adversity. Without adversity we would never know triumph. How would we ever relate to those in need if we ourselves had never experienced it? Here is a simple way to overcome adversity and accelerate your success:

1. Define the problem in front of you in the greatest detail possible
2. Write down every potential outcome from the situation as you see it today
3. Decide what one outcome is the worst possible scenario.
4. Develop a plan to mitigate the impact of this scenario.

Once you define the problem in detail you will find that it isn’t as bad as you imagine. Our imaginations always paint things worse than they are. This alone will reduce the stress level by eliminating some uncertainty. By choosing the worst possible scenario you face the worst possible outcome. I think you will find that it isn’t as bad as you thought. Finally attacking this scenario with a plan to minimize its impact on your life will put you in a position to win. Remember this is the worst possible scenario. Everything else is peanuts compared to this.

Having a plan and working your plan is the only way to take responsibility for what happens to you. The environment changes, plans change, results vary. The goal is to have the final result better than the results you would have gotten doing nothing.

“A clear vision, backed by definite plans, gives you a tremendous feeling of confidence and personal power.”
Brian Tracy

Hire Slow, Fire Fast

This is an adage we all know. Typically we hire faster than we would like because each employee represents work that is piling up. We fire slowly, partly because it is unpleasant and partly because we just somehow expect it to fix itself. In some cases I would even suggest we fire slowly because we don’t realize there is a problem until we’ve had to deal with it for some time. My background is sales and marketing, but throughout my career I have managed many operational types as well. To me, operational employees are easier to evaluate because they typically are in the middle of the business cycle. They are given work to do and there is an expectation of the quality and quantity of effort. Problem employees produce sloppy, incomplete or no work.

Sales people are a different kettle of fish. When they come on board there is a natural expectation that it will take time for them to come up to speed. In many cases they have to build a pipeline. If the sales cycle is six months, it should take on average six months to close their first deal. Most sales people don’t start completely from scratch, but there is a very good possibility that their territory have been vacant for some period of time and is therefore more or less dormant. So how long do you give a new sales person before you start the “are you the right person” discussion?

My suggestion is day one. Each business should have a documented and repeatable sales methodology. That methodology has certain milestones. There are leads and suspects and prospect and qualified prospects and proposals and contracts. There should be prospecting scripts and data gathering outlines and proposal templates. There are a myriad of tools available to start evaluating the progress of a new sales person the very first day. Each new sales person should have a 90 – 120 day plan that outlines expectation. The expectations should be targeted toward results, not activity.

Here’s the hard part, you’ve got to pay attention. You can’t have your best sales person training the newbie. That creates two problems. If you follow a program for the first 90 – 120 days you will quickly find out if the new sales person can perform certain critical aspects of the sales methodology. You can compare their performance against a standard at each phase of development. This developmental approach is better for the company and the employee. If your sales methodology works for the sales team in general it will work for the newbie. They perform better within the sales culture of the company, thus making more money and so do you.

If they cannot master a critical component of the sales methodology and you’ve tried every mentoring approach you have, then it’s time to have the “are you the right person” discussion. I personally believe that if you are having the “are you the right person” discussion you, as the hiring manage, screwed up somewhere. Sometimes we don’t like to admit that, so we keep pushing a square peg into a round hole. We all make mistakes. Good managers recognize them before they affect results and correct them. Other managers make excuses or cover them up.

Here is the really good news for you…. If you have a program and you’re following it, then the new sales person knows where they stand at all times. The “are you the right person” discussion might be brought up by them. They see the goals, they see they’re not making them, they understand they have a problem. The discussion is not a shock. My guess is that if you have a decent hiring process and a decent development process, then this discussion will very seldom ever take place.

That’s the goal anyway….

Is it time to go Viral?

I was thinking about viral marketing and how to take advantage of it if you don’t have a gee whiz product. What I mean is this, what if you don’t have the kind of product that would cause someone to pass it on to their e-mail list. That is one of the primary premises behind viral marketing. What are you saying that’s worth repeating? That’s pretty hard for a lot of companies. What they do just isn’t neighborhood party chatter. Most of your neighbors probably don’t know what you do for a living and don’t care. Either that or it’s so common place they don’t think twice.

We can get advice for solving this problem from two primary places. (This is based on my limited reading so feel free to add your own sources) First is a great book by Chip and Dan Heath “Made to Stick”, and the other is Dan Tapscott’s book “Wikinomics”. Wikinomics is a little of a challenge to me because it reeks of socialism, but that another subject for another time. So here is how I think we can go about building a viral experience that will promote our company.

If we don’t have that mind blowing concept or product that is going to make almost everyone sit up and say “WOW”, then we need to find an angle that will make some of them at least say “Interesting!” The concept does not have to be directly related to your business. It can be tangential to it. Here’s an example: Let’s say I do technology consulting for billing systems in the wireless telecommunications market. It may be pretty hard to get more than a few people to say “interesting” more or less “WOW”. But if I start a Blog or drip marketing program concerning the latest developments in consumer mobile devices, it could go viral and it is in the same space as my practice.

You might be able to find the right subject by using collaboration with, not just your employees, but customers and suppliers. Put some type of reward out there for the best ideas. It doesn’t have to be big, just enough to spur interest. Remember people love recognition over material things. The banter back and forth concerning the ideal subject may turn out to be the viral marketing you’re looking for. Even if it’s not, this is where Chip and Dan come in. Their book will give you the step by step instruction you need to build a story that will not only stick in the minds of those that hear it, but cause those same people to pass it on.

Just like varnishing a table…Let dry and repeat…. Keep in mind to build a brand around viral marketing the same rules apply as traditional marketing….Consistency of the message. Don’t bounce around from subject to subject. Pick something with staying power and build on it. I would start with a Blog, as opposed to drip e-mail marketing, because there is a better feedback system with Blogs. If you are not getting comments and visitors, then it’s not going to go viral on you. Once you figure it out, you can add it to your drip marketing program with some level of confidence that people will read it and pass it on.

If you’re really serious about this, hire a professional to help. They can help craft the message so that it has the highest impact. They can also optimize exposure to attract viewers.

"If the Internet can be described as a giant human consciousness, then viral marketing is the illusion of free will."
- By George Pendle