When I’m exploring sales performance issues with CEOs and their sales leaders, I always dive deep into what they feel the next steps should be.
I hear things like:
“We need a sales process—we’re not growing volume/margin like we should.”
“We need better efficiency and transparency--our CRM isn’t performing.”
“Our salespeople need better motivation--help us change the compensation plan.”
These may be valid pieces to the puzzle, but they’re not necessarily the highest priorities.
Only rarely do I hear an accurate self-diagnosis of the root cause of a lot of pain:
“We need to get the right people on the bus.”
The truth about firing
A key difference between top performing and underperforming sales leaders is the speed with which they fire underperforming salespeople.
My experience is confirmed by recent research done by Steve W. Martin of the University of Southern California.
His interviews with 800 sales leaders and sales professionals bring the old adage “fire fast, hire slow” into sharp focus: top performing organizations fire within 1 to 4 quarters; underperformers take 9 quarters or more.
Top-performing sales leaders take action quickly, and they do it without creating performance-sucking chaos.
5 ways to relentlessly execute a talent agenda and win big
- Ditch the compensation initiative
Compensation—commission or bonus structure—is never the best first step in solving a sales team’s performance issues.
Weak performers might temporarily be motivated to perform better, but ultimately they can’t or won’t be able to consistently maximize their earnings. Money doesn’t create selling skills.
Don’t modify compensation and hope for the best; build a plan for underperformers first.
- Craft killer performance evaluations
I see a lot of broken annual review processes. They reflect broken relationships between business leaders and Human Resources. No wonder many companies are ditching annual reviews in favor of less formal, rolling evaluations.
Sales leaders, beware; danger lurks in that trend.
Less formal evaluation processes quickly degenerate into using sales volume as the only yardstick. Sales volume is easy, but it’s one-dimensional and therefore seriously flawed.
“What’s wrong with that?” you say, “Delivering on their (and my) sales number is all I need to be successful.”
It won’t yield consistent performance.
Do the tougher work of evaluating softer competencies like “collaboratively maximizes value with customers,” and its cousin “effectively engages cross-functional internal resources.”
Assess your people on their ability to create value; volume growth and stronger margins will follow.
- Coach like Vince Lombardi or Pat Summitt
Top performing sales leaders are able to fire in 1 to 4 quarters because they have a 1-on-1 coaching agenda for each of their sales professionals, and a management cadence for executing it.
Firing without coaching is irresponsible and risky; you’ve got to do the work.
Taking the time to teach allows you to challenge underperformers to raise their game, and the bonus is a clear assessment of their progress.
Field coaching also offers the opportunity to build customer relationships and decide who should pinch hit in the event you take action on the sales professional.
As with other aspects of sales leadership, having a process for coaching increases the odds of executing it consistently and effectively. If you have a field-based sales team, my Managing by Riding Around white paper details how to implement an effective coaching process.
- Always be hiring
Not everyone responds well to a coaching agenda, but it’s not your personal failure as their manager if they aren’t right for the job.
It’s easier to make the leap if you’ve been proactive about minimizing the pain of severing poor performers and unanticipated departures.
Partner with your HR professional. Have a search process at the ready, if not already under way. Nothing screams “inattentive leadership!” more than a long open territory.
Last, consider talent selection as a process that can be continuously improved. For example, adapt to the transition from baby boomers to millennials by designing a selection process that focuses more on skills and less on industry knowledge.
- Message, Message, Message
Once you’ve made the decision to take someone out of their sales role, seize the messaging opportunity. Top sales leaders are intentional about the narrative of talent changes in their organization.
It’s an excellent opportunity to reinforce which skills and behaviors are most important for the team to win.
Segue as quickly as possible from announcing the severance to sharing (yet again!) your vision of where the organization is going.
Take charge of the evolution of your sales team by making “who’s on the bus” first on your agenda.
Ditch the compensation initiative,
craft killer performance evaluations,
coach like Summitt or Lombardi,
always be hiring, and
when firing, message with a purpose.
There’s no better way to accelerate your journey to industry-leading performance.
Do you agree?
- Does firing poor performers within 1 to 4 quarters feel like a game-changer?
- What’s your take on these five imperatives for sales leaders?
I look forward to engaging with you on this.
Everett Hill works with CEOs and CSOs to grow B2B sales. With his help they achieve new levels of sales performance by connecting their competitive strategy to tactical execution and customer experience. Prior to founding Catalytic Advisors, he was a sales leader and General Manager with significant P&L responsibility in manufacturing and distribution companies. He holds an engineering degree from Princeton University and an MBA from the Harvard Business School.Copyright © 2016 Catalytic Advisors, LLC. All rights reserved.