Sales Management: Bad Management – Performance Improvement Plans

sales manager texting on his phone at a cafe

There are two sides to everything: Ying and Yang, Good and Evil, Black and White, Summer and Winter. Similarly, Sales Management has fun, and not so fun parts. It can be rewarding but also includes making tough decisions. The fun part of Sales Management is working with your team and watching them excel. However, when it comes to dealing with constant lack of performance, you as the manager need to implement change. What are you supposed to do if a team member does not live up to the required standards? Should you fire them? Should you ignore under-performers? I think the answer to this question is pretty straight forward: support your team, in good times and in bad times. In good times and bad, do what is best for THEM. My tip: avoid using performance improvement plans (PIPs)

Performance Improvement Plans – Why I Hate Them

In my 20 plus years managing Inside Sales and Teleprospecting teams, I have had to put a handful of people on what is known in the industry as a PIP, a Performance Improvement Plan. In my opinion, PIPs don’t live up to their name, as they are not about improving an employee’s performance.  Rather, a PIP is a process document used to prove that the Manager has tried to help the employee, over a period of 30-90 days.  The documentation is a paper trail that is used to protect the company from legal action.

I have read many blogs that call PIPs evil.  I agree because they suck the humanity out of the Sales Manager (who really isn’t trying to help an employee improve) and the employee who is being humiliated throughout the process.  They also impact the rest of the team, bringing morale down and taking everyone’s focus away from what is important. I, personally, have never seen a PIP work.  The reason is that PIPs are not about helping a struggling employee improve performance.  Instead, they are a clear indication that they are about to be terminated.

I understand that PIPs are necessary to protect companies from future legal actions.  I know that some employees are not going to work out, no matter how great the interview process or background checks.  Still, I disapprove of PIPs and for several reasons:

  1. They are humiliating.  No matter how hard one tries to keep the PIP process confidential, most people on the team know when someone is on a PIP.
  2. PIPs lower morale.  Team members who are not on a PIP have their own opinions about the individual on a PIP.  If they like the individual, Management is the bad guy.   Even if they dislike the person they may sympathize with them because they have to go through the PIP process.  Again, Management is the bad guy. Low trust and respect between Sales management and employees is directly proportional to a lack of motivation and success.
  3. PIPs require Managers to spend time focused on the documentation/paper trail process, giving them less time focusing on managing the team to success.  While the PIP event is in play, the “good” team members are, typically, left to fend for themselves, because the manager is heads down focused on the poor performer for the next 30-90-days.

How to Avoid PIPs

I have used two distinct methods for avoiding PIPs.  The first one is a GOSPA Plan.  The second one is a recruiter.

GOSPA Planning

When employees are given the opportunity to develop their own success plans (see my blog on GOSPA Planning: Goals, Objectives, Strategies, Plans, and Activities) and understand the metrics and consequences for not meeting the metrics, PIPs can be avoided.

For example, say a Teleprospector has the following metrics to meet each month:

–          Make a minimum of 800 dials/month

–          Have 20 Key Conversations with decision makers

–          Build a Teleprospecting lead pipeline of a  minimum of 24 potential leads

–          Generate 8 qualified leads to pass to Sales Qualified Leads (SQLs)

–          Receive sales approval on at least 6 of these SQLs for addition to their Sales Funnel

The Teleprospector is required to build a quarterly GOSPA Plan, which outlines how they will achieve the above metrics.  The manager’s job is to review the GOSPA plan, ensure that it is a viable plan, and to review with the employee what will happen if the metrics are not met each week/month/quarter.  Working with the Rep, the manager should discuss the consequences for low performance.  Assume that the Rep under-performs on his metrics by 20% for a period of 4 weeks.  It should be understood that the manager will take specific action to help the employee improve, such as sitting in on calls or providing coaching on the specific issues.  If improvement doesn’t happen within a 90-day period, termination may be the next step.  The manager manages all employees to this standard.  Everyone is aware of the actions and consequences for not meeting the Goals that the employee outlined in his GOSPA.  The required “HR/termination” documentation is an offshoot of this process.  No PIP is required.

If sales management holds weekly individual meetings to review performance and achievement-to-date against plan, everyone will know where they are, each and every week.  This information is documented as a standard course of managing the team members.  The manager’s goal is to quickly identify issues and to really work to help an employee improve, if they are falling behind their stated metrics.  When a GOSPA  Plan is in place, the employee should be going to their manager if they are having problems, because they developed the plan and know what they are accomplishing or not.  In essence, it is their plan and they are responsible for working to the plan as they outlined in their plan.

Recruiter to the Rescue

Many years ago, I was asked to turn-around a call center that was under-performing.  The team of eight was struggling to meet the demands of the job.  I quickly implemented my Best Practices and was able to get the team moving in the right direction.  This took about 6 weeks.  Once the team understood what they needed to do and had additional training, they began to generate quality SQLs for the sales team.

Unfortunately, one of the team members was having a difficult time picking up the phone to make calls.  The bad news for him was that Teleprospecting is a phone job.  While he was very confident about the technology and solution offering, he hated making phone calls.  He was the most technical person on the team.  I could see that he would make a great customer service rep for some company.  I didn’t know how he got hired, but he was a good person and I wasn’t going to humiliate him by putting him on a PIP.

I asked his manager if he knew of any recruiters who might have customer service positions available.  The manager got back to me within a few days with a few recruiter names.  We called them and asked them to anonymously recruit our team member out of our company.

Within two weeks, our lack-luster team member was in my office.  He handed me his letter of resignation, stating: “This is a much better job for me.  I like talking to customers; I just don’t like initiating phone calls”.

By utilizing a recruiter to “remove” this person out of this “wrong-for-him” job, I saved our company time, money and kept morale from sinking.  It was the most compassionate way to manage this situation.  The team member will never know how his manager and I helped to get him the job that was a better fit for him.  We did it without humiliating him or impacting team morale.

PIPs are never about performance improvement.  If you must put someone on a PIP, do so as a last resort.  My best advice is to manage performance, every week based on a plan like GOSPA, that your team is responsible for building.  Or use recruiters to move people out of mismatched positions into more suitable positions at a different company.  Use compassion when helping people.  Your compassion will help you and your team in the long run.

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Task Force Teams Help Team Buy-In for Great Results

task force teams

Overview: Learn an effective method for managing your sales team through the development and implementation of task force teams. 

Managing people has been, and always will be, a widely discussed topic. Managing Sales Teams is no exception. Should management be a top-down approach, where the manager implements their Best Practices no matter what? Or should management take a bottom-up approach, where employees participate in the decision-making process and are allowed to influence goal-setting and change workflows to the best of their knowledge? What is the best way to improve performance and productivity?

Setting Up Task Force Teams for Sales

Over the past 15 years, I have been asked to turn-around over 50 Inside Sales and Teleprospecting organizations.  The method that I used to win over the hearts and minds of each team was Task Force Teams.

After the first week or so in the role, I created task force teams regarding specific issues and concerns that I uncovered during interviews with each team member. I created task force teams on topics such as Key Performance Indicators (the metrics used to manage the team), Commission Rates, Quotas, CRM, Contracts, and other issues deemed important. I asked that team members join one or more of the task forces to resolve the outstanding issues. I also informed them that some of the issues, like commissions and quotas, will need Executive-level sign off and that some issues may not be resolved exactly as we would like. My teams knew that once our recommendations were approved, we would be held accountable for achieving our numbers for the plans we outlined.

I limited participation to 5-7 team members for each of the task force teams. I managed the task forces as follows:

  • I started with a brainstorm session or two which helped us get all ideas on the board for later review
  • The ideas review is the next step. During this phase, the task force reviews and eliminates any ideas that are not viable or are less likely to be approved by Senior Management
  • Task force recommendations are captured in a power-point deck and reviewed by the team prior to the presentation to the manager
  • Each Task Force Leader presents the approved recommendations to the entire team. It is understood that the approved task force recommendations are to be adhered to by the entire team. In most cases, there have been a 95% or more agreement rate about the recommendations as outlined by the various task force teams

Task Force Teams – Case Study

One of the organizations that I turned-around was the Inside Sales team for a company that had lost half of its clients and had not seen any new customer sales since the recession. The Inside Sales team had not hit their revenue targets in many years.

During the assessment of the organization, I found that the sales team had no metrics that they were measured against and held to. For example, Sales Reps didn’t have quotas. The sales funnel was full of opportunities; however, 80% of these were no longer feasible because there was no sales methodology in place to effectively manage deals through the sales funnel. To complex the issues, team members made fewer than 10 dials per day each. I knew we had to get that number up because this was a phone job and the only opportunity to get more prospects was by calling them. I realized that my Sales Management experience was needed to get this team to achieve their goals and increase revenue.

Working with the task force teams, we decided on a sales methodology and a set of metrics that the team agreed would help them achieve their newly assigned quotas. Everyone agreed to the minimum metrics and worked towards them as a team. At the end of the first year, revenue had increased by 57% and revenue from new prospects had increased by 80%.

However, I don’t always agree with task force recommendations. If their recommendations are way off the mark (from my experience), I work with the team to get their ideas to align with what I know will work. No matter what, the caveat is that if we don’t see improvement within 90-days, we will need to regroup and come up with a better process or set of metrics. This becomes a continuous improvement process in which experimentation is essential. Similarly, Sales Management is not a stagnant process. As the manager of a team you need to be flexible and listen to the suggestions of your employees. Sales Management is about working with your employees and it’s really good when task force members can work together to analyze how their recommendations are working or not. I recommend that these teams review their recommendations and results at the end of each quarter.

Increase Productivity

Many studies have been undertaken on the subject of Sales Management and employee involvement in the decision making process. Most research agrees that participation has positive effects on performance and thus productivity. For example, C. A. L. Pearson conducted an experiment involving two groups of workers: a group where employees were included in goal setting and a control group that executed traditional work procedures. The results indicated not only that those “who were engaged in participative goal setting reported […] greater job satisfaction”, but that “goal setting and performance were positively related.”[1] Similarly, another paper found that “empowered employees largely improve performance by finding innovative ways of correcting errors in service delivery and redesigning work processes.”[2] These findings are in line with my own experience, and show that if you get the buy-ins from your employees, you will see an increase in performance, productivity, and eventually revenues.

Rather than telling the team what to do, I give my teams the ability to determine their destiny. When teams are given the opportunity to provide their input on specific aspects of the job, the manager has their “buy-in,” and team members are more likely to work toward the “team” assigned goals. Why wouldn’t they? It’s their plans and their ideas and therefore their responsibility to make them work. This process has worked for me and has helped my teams greatly improve their performance.

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[1] C. L. A. Pearson, “Participative Goal Setting as a Strategy for Improving Performance and Job Satisfaction” (1987), Human Relations Journal, Volume 40 (8), pp 473-488 <http://hum.sagepub.com/content/40/8/473.abstract>

[2] S. Fernandez and T. Moldogaziev, “Using Employee Empowerment to Encourage Innovative Behavior in the Public Sector” (2013), Journal of Administration Research and Theory, Volume 23 (1), pp 155-187 <http://jpart.oxfordjournals.org/content/23/1/155.abstract>

Sales Management: Love Thy Employee

I believe that all people should be treated with respect.  People who believe they are respected, appreciated and valued tend to be happy people.  From my experience, employees who believe that they are respected, appreciated and valued are productive and motivated.  I believe that it is the job of every manager to respect, appreciate and value their employees. This is what good Sales Management is all about.

When I was the Director of Inside Sales for a large educational software company, I managed a team of 18 Inside Sales Reps and 2 Telemarketers.  Many of my team members were at their desks by 5:30 AM Pacific, because they had Eastern territories.  I made it a point to walk around their area at 5:45 AM and then again at 7:30 AM, when the rest of the team was at their desks.  I did this ritual every day to offer encouragement, answer questions and to let everyone know that I appreciate them.  Sometimes I would bring in bagels or donuts and offer these to the team.  After a few weeks in my new position, the team began to expect my daily walk-throughs.  They were ready with their feedback or progress updates.  If someone was down, I would offer encouragement or provide insights on how they might solve a particular problem.

Every quarter, the CEO of this company made it a point to come to our offices and do “call-challenges” with the team.  He would sit with each Rep and make calls to their prospects using his opening statement.  Then the team member would do the same, using their opening statement or script.  He would provide feedback and encouragement throughout the process of making these calls.  The goal was to see who was able to move the prospect to the next level.  (The CEO never mentioned to prospects that he was the CEO, which would have given him an unfair advantage).  The team welcomed his visits and the CEO got a kick out of seeing how each team member handled their prospects.  He admitted to me, after these events, that he learned some new tricks.  He let the team know that he was impressed by their focus and effort.

The VP of Sales, at the same company, would often ask me what the team needed from him to boost morale and to make them feel appreciated.  He would drop by the office as well, providing feedback and congratulating the team when we met our monthly and quarterly objectives.

I saw how important it was to the team to have the Executives visit, and provide their insights and feedback.  I decided to ask other Executives from Marketing/ Finance/Legal /Product Management to visit us to discuss campaigns or to address issues on contracts or commissions and to hear about new product functionality.  The team loved having the opportunity to meet with the Executives.  These meetings gave them the sense that they were valued and respected.

This team was named region of the year for achieving 114% of quota.  Our success was due to many factors.  However, I believe one important factor was that this team felt the “love” from the company’s Senior Executive team.

My opinion is not only supported by my own experiences, but by many human resource studies. After my research, I can conclude that an overwhelming percentage of literature confirms that respect at the workplace generates not only a more productive working environment, but helps the organization meet its goals. For example, Daniel J. Koys concludes from his literature review that “organizational commitment is positively related to the perception that HRM activities are motivated by (a) management’s desire to show respect for the individual and (b) management’s desire to attract/retain employees”. [1] Similarly, a study of Total Quality Management argues that “Empowerment and teamwork significantly enhance job involvement, job satisfaction, career satisfaction, and organizational commitment.”[2] Commitment and a feeling of belonging create a positive working environment, and if an employee feels like his/her work is appreciated and valued, he/she is more willing to go the extra mile for the company’s well-being.

Create a culture of appreciation.  Ask senior executives and mid-level managers to take part in this process.  Morale will be high and your teams will, by feeling the “love”, be more productive and engaged at work.

 


[1] D. J. Koys, “Human resource management and a culture of Respect: Effects on employees’ organizational commitment” (1988), Employee Responsibilities and Rights Journal, Volume 1 (1), pp 57-68. < http://link.springer.com/article/10.1007/BF01385453>

[2] N. Karia and M. Asaari, “The effects of total quality management practices on employees’ work-related attitudes” (2006), The TQM Magazine, Volume 18 (1), pp. 30-43
< http://www.emeraldinsight.com/journals.htm?articleid=1537485&show=abstract>

Sales Management: Manage Your Team Their Way

Managers, how often have you heard, “I want a new territory!”

Past employers and clients have often appointed my skills to transform Inside Sales and Teleprospecting teams that offer dismal results. To date, I have completed transformations at 56 companies. Every situation displayed the same symptoms. Teams were given a set of objectives and specifics on how to meet said objectives. Unfortunately, most of the team members had not devoted any time towards their strategy or objective. Each situation displayed a lack of results and poor morale. Ultimately, the problem was a lack of effective sales management.

Director of Inside Sales

For instance, as a Director of Inside Sales for a $100M Educational Software company, I was appointed to the task of generating incremental revenue from the Inside Sales team.  During the second week of my employment, a team member (Ms.B) had already sent in a request to be removed from her current territory, due to her lack of success in the region. Ms.B was a hardworking and competitive individual who had burned out from her inability to fulfill her quota. She held her “bad” territory accountable for her lack of success.

Furthermore, when I examined the plan for Ms.B’s territory; which should have mapped out each district and key personnel, alongside a strategy on how to penetrate each territory, she claimed to have none. Thus, I began to collaborate with Ms.B to create a plan that would allow her to penetrate her existing territory. I reassured her, if there was no growth or positive results within a two-month timeframe, I would transfer her to a “better” territory.  This was the end of the year and she had only 2 months to meet her objectives.

I presented Ms.B with the GOSPA planning methodology and requested that she obtain some basic details about her territory, such as the total number of districts, key personnel (Directors of Curriculum and Superintendents), etc. After gathering such information, I began to guide her through the GOSPA method. I magnified the importance of keeping this plan short and simple, which would allow her to review and modify, on a daily basis – according to studies, becoming more effective, with each review

We began by mapping out the strategy that would allow her to meet 110% of her quota, keeping her desired commission in mind. Each week, we would regroup and assess her placement according to her GOSPA plan. Over the course of four weeks, she began to recognize that her target objective of, 110% of plan, was too high. Ms.B modified her plan to an objective of  105% of quota. By the end of two months, she reached her quota of 105%, while remaining in the same territory, as well as receiving “President’s Club” membership for the over-achievement of her quota.

GOSPA – Planning for Success

“My way or the highway.”

However longstanding and embedded a statement, this is no longer an effective strategy for management. Companies risk creating a rift between them and their employees. Youthful, budding employees will question the reasoning behind methods that restrict experimentation, while experienced employees will prefer to utilize their own, proven methods with which they are most comfortable. In both situations, allowing the employee to become engaged and access the way that is most effective for them to achieve, their quotas, is more productive and yields greater results when compared to following a rigid set of processes.

Accordingly, you, as the manager, have your own set of priorities and objectives that must be met within each quarter. It is your responsibility to enforce behaviors that will allow your team to achieve their objectives. The more youthful employees may believe their social media, internet, and technology skills are the best techniques to meet their objectives. The more experienced employees will have their own techniques. However, these strategies may not be in line with your target objectives. Although it is your responsibility to assure the productivity and effectivity of your teams, placing strict rules and requirements for certain tasks may make your employees feel constricted and lower morale.

The question remains: “How can my team meet their objectives without the implication of an authoritarian management?”

The answer is GOSPA (Goals, Objectives, Strategies, Plans, and Activities).

GOSPA is a short, 1-2-page planning tool, which outlines specific tasks that will allow each team member to meet their Key Performance Indicator (KPI). As each KPI is met, the probability of meeting each objective also increases. GOSPA has been a longstanding tool for companies to meet their objectives. I was introduced to this concept in 1991, by the Chief Sales Officer for one of my employers, who required each Field Sales and Inside Sales person to build a quarterly GOSPA plan. It was a highly effective tool and I began using this methodology throughout my career.

An effective GOSPA plan aligns employee’s goals and objectives, with the objectives and KPIs of the management team.   GOSPA allows each employee to create a plan to meet their objective that best fits their position, giving a sense independence and value by allowing them to contribute in the decision-making process.

Manage Your Team Their Way

The most effective way to manage employees is to allow them to find their own technique towards success. Building a GOSPA plan (which you, as manager, will review) will help employees find their mistakes and correct their actions, and remain accountable for monthly and quarterly results. As a manager, I require all of my teams to build a quarterly GOSPA. When Teleprospectors and Sales Teams know their Goals, Objectives, Strategies, Plans, and Activities, you, the manager, can review their KPIs against the plan during your weekly meetings. Now, it is their responsibility to meet and stand by their stated objectives.

During the GOSPA planning sessions, I recommend that the manager and employee create an agreement for the consequence of not meeting stated objectives. Suppose, a team member is unable to reach their GOSPA plan, as an example, you can discuss the methods of additional coaching/support/performance improvements that may be required for the individual to meet their numbers. Advanced planning removes the element of “surprise” for the employee, giving them the push to reach for help and constructively criticize their own performance.

As a manager, it is your responsibility to train the team in the various ways to implement their GOSPA plan. However, you must review each GOSPA for its practicality. Team members often get enthusiastic about GOSPA for its ability to align to their personal goals (my recommendation). For example, let us propose that one of your team members needs a certain amount of commission to purchase a new car. If she aligns her GOSPA to this plan, she will become more motivated to work towards her plan and succeed in her objectives.

Example GOSPA

The following is an example of a draft GOSPA plan to highlight how a rep will begin the GOSPA process.  This format has worked well for my team members.

GoalTo Be The Top Producer Of The Sales Department
ObjectivesGenerate $2 Million in Sales for 2017 or 110% of quota. Earn total commissions of $100K
StrategiesOn-Board At Least 5 of Top 25 Lenders, each quarter.
PlansIdentify & Demo to Decision Makers at Top 25 Lenders
Activities1.Review Trade Magazines to help identify new large customers of top credit unions in the US.

2. Make calls to all of the top credit unions to invite them to a demo.

3. Ensure that I make 50-60 dials per day.

4. Have at least 4 key conversations with influencers or decision makers, every day.

 

GOSPA – A Powerful Planning Tool

GOSPA planning is most effective when it is applied on a quarterly basis. They should be short and simple, allowing your team to review and modify their plans on a daily basis. However, GOSPA plans should not only align themselves to corporate goals, but also their practicality. If objectives are set too high, there is a higher chance that goals will not be met. As an example, if a team member builds a GOSPA plan to meet 150% of their quota: this is not practical due to the number of calls and emails required for prospect contacts each quarter. Your job, as manager, requires you to examine the practicality of these GOSPAs.

GOSPA is a powerful planning tool.  When it is implemented and managed regularly, team members are given more control of their destinies and results.  The payoff for managers results in a successful and highly motivated team.

 

Alicia’s Tip: Use GOSPA to help your team self-manage to corporate expectations.  GOSPAs should be based on team member goals, such as the amount of commission they want to earn, each quarter, or awards they want to achieve, such as Teleprospector of the Quarter. Keep the GOSPAs simple and easy to review. Manage your team’s GOSPA’s to ensure that they are realistic and map to corporate goals.  Email me at alicia@somametrics.com, if you want more details about GOSPA.

Why Insufficient Sales Pipeline means an Unproductive Sales Force

If a company cannot provide its Sales Force with a full pipeline of high quality leads, then it is forcing its sales reps to do what does not come naturally to sales reps—cold call to find prospects. The end result is low productivity, demoralized sales force, and exodus of the best sales reps leaving only the mediocre to continue in unproductive work.

If you don’t have sufficient pipeline of quality leads, you are better off shrinking your sales force, freeing up cash to build your leads pipeline, and then hiring more sales reps only if you can feed them with a strong pipeline of sales leads. Here is why.

Sales Reps are no Good Cold Calling

Prospecting–calling to find prospects–is what we refer to as a high-volume, low touch interaction.  The sales rep must typically make 60-90 dials a day just to get 4-6 connects, of which perhaps one or two may be qualified prospects. Most of these dials go either to voice mail, or to a receptionist. The few conversations typically last 1 minute or less, just long enough to make an appointment for another time.

This in direct contrast to what most Sales Reps are good at, which is low volume, high-touch interaction. Most sales reps are very good at meeting with, building rapport with, and engaging prospects through the sales lifecycle, hopefully to a successful close. They can do maybe 8-10 of these per month.

Asking Sales reps to make cold calls in the hopes of finding their own leads is like asking a 10K runner to win a 100 meter dash. Both may involve running, but they are very different kinds of running and success in one will not directly translate into success in the other.

They typical sales rep hates cold calling and will likely not spend more than a couple of days a week making a handful of dials. What is this rep doing the rest of the time?

Live at the Mercy of Precious Few Prospects

If your sales reps don’t have a strong pipeline, then they tend to think “scarcity” instead of “abundance”. They start thinking that they can’t afford to lose any prospects. Now, they are at the mercy of savvy decision makers who know they can get a lot of information and help from the sales rep without having to pay for it—all they have to do is make the rep think that she still has a chance of winning a deal.

Nothing wastes a sales reps time than to be strung along like that. And nothing burns through a company’s funds than payroll for non-productive people who are working hard, but not adding any meaningful value.

Sales Exodus

While the average sales rep may stay because they need the job, acting busy when he or she doesn’t really have much in his or her sales funnel, the good ones will leave because they are used to making real money–salary alone won’t be nearly enough for them. The really good sales reps expect and need to make big commission checks, and these won’t come unless they close deals regularly. If they have to cold call to find leads, they will leave for a company that provides them the leads they need.

In the end, the company is left with the most mediocre sales reps, and still paying salary for sales that don’t materialize.

On the other hand, if you feed your sales reps with high quality leads and provide them with solid pipeline, then they spend their time doing what you hired them to do—work with interested prospects towards a successful close.