I have been a sales professional for more than 21 years. And early in my career I learned that for those in the sales profession, performance management and succession planning are unapologetically transparent.
You either make your quota… or you don’t!
On Sinking or Swimming
If you exceed expectations with your quota, you’re rewarded with accolades and the respect and admiration of sales and company leadership alike. Sometimes, you’re even hoisted on shoulders and carried around the office (just kidding… um, sort of…)
- If you don’t meet or exceed expectations, you are fired
- Or you may be given a chance to improve your performance
- Or, you may be escorted from the building immediately upon notice
No matter when the dismissal occurs, the message is clearly sent and received:
If you perform, you stay – if you don’t perform, you go.
This methodology rarely garners sympathy outside of the sales profession. Sales people are typically well paid (with generous salaries and unlimited variable income in many cases), and their rainmaker status assures that they remain high-profile/high potential employees.
Different Types of Success
Hired “sales guns” love being judged by the numbers. They live and breathe according to their stack rankings and W2’s.
And they often leave your organization once all challenges have been met and the thrill dies down.
In contrast, true sales professionals want to be appraised beyond their ability to “make it rain.”
They want to be appraised by:
- Their ability to establish and maintain internal and external relationships
- How they help colleagues develop and grow
- Other more difficulty-measured performance metrics (that aren’t always obvious)
They want all of these apparent and hidden metrics to be counted and transparent to their leaders
Performance Leadership & Measurement
In their article “Apples and Apples or Apples and Oranges? A Meta-analysis of Objective and Subjective Measures of Salesperson Performance,” Greg Rich, William Bommer, Scott MacKenzie, Philip Podsakoff, and Jonathan Johnson’s affirmed that salesperson performance is a prominent area of interest in sales force management.
And one motive for this area of research is the clear link between sales performance and corporate revenue.
In their 2006 Harvard Business Review article “The New Science of Sales Force Productivity”, Dianne Ledingham, Mark Kovac, and Heidi Locke Simon predicted the perils of the looming economic downturn on salesperson retention and performance measurement.
The authors wrote that forward-thinking sales leaders should adopt a research-based approach to measuring sales force effectiveness.
They shouuld adopt practices focusing on relevant data analysis and process evaluation to narrow gaps between achievers and non-achievers.
This approach is particularly salient given that many organizational leaders decrease hiring during tough times, and sales leaders seek to develop their current sales staff rather than hire new staff.
The bottom line is this:
Sales leaders lead diverse groups of people, and some of those people perform better than others.
While the easiest performance measurement for sales staff is quota attainment, leaders have to look beyond the numbers to determine what their followers need to succeed.
Successful Sales Leadership
So, how do sales leaders measure performance beyond sales quotas?
1. Establishing FORMAL and Diversified Performance Objectives
By establishing a formal performance review against non-quota based criteria, sales people can align their goals with non-revenue generating organizational objectives as well.
I know, I know… Joe was hired as an Account Executive because of his experience and ability to drive revenue in the territory…
If, however, Joe also holds an advanced degree in a relevant discipline, perhaps his objectives could reflect the totality of his potential across the organization – and not just his stack rankings.
2. Provide Professional Development Opportunities
The average sales professional doesn’t just want a paycheck – he or she is also looking for an opportunity to grow and develop within their organization (see my article “Is There Really a Retention Conundrum?”)
In my own research of sales leaders within F500 organizations, I learned that the lack of professional development opportunities (coaching, mentoring, training, and more) could restrict upward organizational mobility (see my research “Critical Success Factors of Exemplary Sales Leaders: A Qualitative Phenomenological Study” for details).
3. Intervene More Quickly
Why wait until the end of the quarter to offer help to the low-performing sales person when their metrics clearly raised red flags months before?
Don’t just spend your weekly one-on-one meetings going through pipeline updates; take the pulse of the overall health of your salespeople’s territories – and their overall performance.
Identify gaps as early as possible so that you’ll have time to plan proper remediation.
I realize I won’t endear the hearts of many by suggestion that sales people are more than just “cash register ringers,” especially when many of them make significant amounts of money.
Sure, sales people are paid to “roll the dice,” but sales leaders would do well to measure them in totality – not because of their ability to “make it rain,” but regardless of it.
So, how do sales leaders at your organization measure the overall performance of their individual contributors? Do they take a “numbers-only” approach? Or do other factors get measured, analyzed, and utilized to assess total productivity, output, and impact on the organization? What steps can your organization do to make sure the full spectrum of talents, gifts, and contributions can be utilized from your sales teams? I would love to hear your thoughts!
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Filed under: Leadership Assessments, Leadership vs. Management, Leading & Developing Other Leaders, Sales Leadership Tagged: | leadership, Performance reviews, sales leadership, Sales management, sales quotas