High Performing Organizations Outperform Low Performing Organizations!

Over the past 5 years, we’ve been trying to understand sales performance.  As part of this, we’ve conducted a comprehensive study of several hundred organizations, including 0ver 30,000 sales managers/executives.  The results of this study are stunning–though they reaffirm beliefs we held.  What surprised us was the magnitude of the performance differences.

Normalizing the data for organization size, region, industry, solution set, we discovered something astounding:  100% of high performing organizations perform better than 100% of low performing organizations!  (The standard deviation was very small).  Intuitively, we have always believed this, but having the data analysis reinforcing this is simply astounding!

Leaders that understand these results, will produce profound performance improvements in their teams.  So let me repeat the results again, 100% of high performing organizations perform better than 100% of low performing organization.  If you are a leader in a high performance organization, be proud of what you and your team have achieve.  If you are a leader in a low performing organization, maybe it’s time for a change.

OK, you’re probably wondering, “What the hell is Dave talking about?!!?”

I have to admit some weariness in reading too many sales pitches masquerading as research insights.

We all know, high performers perform better than low performers—-Duuuggghh!  That’s what makes them high performers.  Can you imagine a high performer doing worse than a low performer?

But too often, we get sales pitches masquerading as market research.  For example, I just saw one study:  57% of high performers, 47% of moderate performers and 16% of underperformers are using analytics.  Stated differently, high performers are 3.5 times more likely to use analytics than underperformers.

It probably goes without saying, this study came from a company selling analytics tools.  Clearly, the conclusion they want people to jump to is, “If I use analytics, I’ll be a high performer because high performers are using analytics.

The study fails to address some very important issues.  57% of high performers are using analytics, but 43% or high performers aren’t?  What’s the difference, why is it that 43% aren’t using analytics but still managing to perform very well?

Alternatively, 16% of underperformers are using analytics?  Why aren’t they performing?  What are high performers doing differently?

The study doesn’t address these issues, but understanding these can drive real insight into how we might leverage analytics more effectively in driving sales performance.

Instead, the study continues, they indicate underperformers will increase their use of analytics by 180% over the next 12-18 months.  What conclusion are we to draw?  I think they want to suggest these underperformers  will move into moderate or high performers just because of their use of analytics.  But instead, rather than 16% of underperformers using analytics, it might be 28.8% of underperformers use analytics.

Unfortunately, too much stuff masquerading as research is trying to drive faulty cause-effect conclusions.  “If more high performing organizations use [inset whatever is being sold:  analytics, social selling, training, tools, paperclips] than low performers, than if I do the same thing, I’m likely to be a high performer.”

Sales performance isn’t that simple–and hopefully managers aren’t that naive or impressionable.

High performers leverage everything possible to drive performance–tools, systems, training, metrics, processes, programs.

Part of what makes high performers great is recognizing things that help drive performance, integrating them effectively into their strategies and businesses.

Clearly, performance isn’t as simple as one or two things that an organization does or solutions they buy.  I suspect that high performers don’t just use analytics tools.  I suspect they recruit the right people, have a strong sales and customer focused culture, have disciplined sales processes, train and develop their people, focus on creating superior value for their customers, focus on creating a great work environment for their people, have a performance orientation that pervades the organization, have high expectations of everyone in the organization……

Yes, lower performing organizations do many of the same things, but high performers consistently execute more of the right things very effectively.

High performance is never about doing one or two things right, it’s about doing most things right and more consistently over time.  It’s about continually learning and improving, relentlessly focusing on getting better.

Afterword:  For a great/fund read, make sure you pick up a copy of “How To Lie With Statistics,” by Darrell Huff.  It was originally published in the 40’s-50’s but is still relevant, informative, and funny.