So, here we go.
For an alternative environment, we will have to look at three aspects, one, what actually constitutes performance; two, what methodology is actually successful in complex sales environments; and three, what constitutes just and enticing remuneration.
Selling is a process. This is a very old hat, but it is telling that most organizations treat selling as a mixture of magic, personality, and flair, and good salespeople to be born not made.
But if selling is a process or, better, a process cluster, then process management success criteria apply. Yes, even if the processes are not based on machines. (Also an old hat, we know)
Now, hold that thought, we will come back to that later, and let us look at methodology or process selection.
For a few decades sales people were trained on the principles of relationship selling, based on the belief that by entering into a quasi-personal relationship with the respective buyer persona, a sale will be facilitated. This myth is still holding strong. However recent research demonstrated that the relationship seller substantially under-performs vis-à-vis the challenger seller in all complex sales transactions. And nearly all sales environment nowadays are complex, no matter whether you sell chocolates, turn-key ready-mix plants, retirement plans or organization reorganizations.
The challenger sales person is successful as the buyer is subsequently convinced, not only that the seller knows his concepts, and that, through knowledgeable challenge of the buyer’s views and purchasing concepts, she understands the buyer industry, organization, value map, but also has her best interest at heart. And that beats golfing and a pint every time, all the time and sustainably so.
This insight will often require full redesign of sales processes and re-education of sales people, and sometimes sales people with different traits will gain mastery of these processes more easily, but selling in this philosophy is eminently more in line with high performance thinking and frameworks.
Targets, KPIs, and anything of that ilk will only get in the way of a successful sale and sales environment. These are not only damaging, they are irrelevant.
Back to the process environment. What constitutes performance in people? First they have to be competent. Easily said. What is being competent in a process environment? It means the processes are stable. Statistically so.
Second, if people know what they are doing, i.e. the processes are stable, they should be able to improve these. Reduce complexity etc. etc. and ultimately variation. You now have people who know what they are doing and can continuously improve how they do these things. For high performance these people will have to be able to assess and confirm whether their process output still fits into the value map of their stakeholders. In short; is what they are doing still delivering the bacon. And this last part is the most difficult, as it requires people to become incompetent voluntarily and by design, at least temporarily so, until the newly designed processes become stable.
So, here we are, performance in people is being competent, being able to and do continuously improve their processes and being able to and do innovate. Targets, KPIs, and anything of that ilk will only get in the way of a successful process environment. These are not only damaging, they are irrelevant.
Now, to the last part. The follies of incentive based, pay-for-performance environments we briefly discussed in the previous post. There is no empirical evidence that pay incentives improve performance. Pay is also what psychologists call an extrinsic motivator, in effect, just pay does not motivate but unjust pay demotivates. Any pay tied to targets, KPIs, etc. must by its very nature be unjust as too many factors outside the influence of the person will impact on the ability to meet any and all performance targets no matter how these are designed.
An alternative environment is pay based on competencies, both position related and position supportive. We work with clients to create salary environments based on three pillars, job-competencies, adjacent competencies, and self-management competencies (Adler).
With these environments our clients achieved sustained salary satisfaction levels in the high nineties, levels we have seen in no other salary environments.
So, well, we hope we ascended to the challenge of providing an outline for a Sales environment free of sales targets/KPIs and commission payments that is far more capable of producing high performance results than the traditional approach.
But we do invite comments and discussion – both public and private.