Today, I want to take a pause in this series. Over the past couple of months, each Friday, we’ve looked at different performance metrics. We’ve focused on establishing numbers and goals for these metrics. It’s worth taking some time to reconfirm what we are doing and why. Too often, I see sales people and managers making mistakes–everything is about the number or goal itself. The focus becomes–have we made our weekly telephone call goal? Have we met our target for the right number of meetings?
When the focus starts to be on achieving the goal, then things can start going off target. If we focus on making the number of telephone calls–we may be making the wrong telephone calls–any call just to make the number. I once was coaching an inside sales team. As you would expect, they each had a daily telephone call goal. I started listening to some of the calls to see how well they were executing the calls. One person was interesting–he was just hitting his goal, he seemed to be making his other goals, but when I listened to his calls, at least 10 percent of them were to friends and family. He knew they would show up on his daily metrics as “calls,” so he knew he would make his “goal.”
Some of you might say, “well that’s what happens when management establishes meaningless goals!” The problem was, he had set his daily call target himself. He was finding it difficult to make the number of calls he needed to make, so he was gaming the system–and fooling himself, just to hit “the number.”
Each of us do this–it sometimes is unconscious, it happens over time. Over time, we may lose track of why we established a particular goal–and our focus becomes the number. That number and that goal become meaningless in terms of helping us improve our overall performance. In the example I cited with the telesales person, it would have been better for him to have not gamed the system. He should have focused on the “right calls,” not just making the number. His manager thought he was doing well, the manager had no idea the sales person was having a problem. When we filtered the false calls out of his performance we were able to sit down and look at the real performance. It turned out over the past 60 days, he could make about 90% of the “right calls.” He was filling the rest with calls just to make the number. When we started looking at the reason he wasn’t achieving his number, it became very clear–he didn’t have a good supply of leads to be able to make a sufficient number of calls. He was calling all the leads he had every day, but there were just not enough for him to achieve his daily call volume. It turned out he was also being measure on percent of leads processed–he was handling 100%, so things were looking good, from that point of view, but he didn’t have enough leads to achieve the call goal he had established himself.
It wasn’t his fault that he wasn’t able to make the right number of calls–he just didn’t have enough leads. No one knew this, no one could help him address that issue.
In another situation, the sales people were making their order quotas, but they weren’t reaching their revenue targets. Corporate management was beating sales management up for revenue–“You aren’t meeting your sales revenue goals!” When we looked at the causes, the reason was far beyond sales’ control. It was in manufacturing–a supplier had failed to deliver critical parts, they could make and ship the products, consequently revenue was slowing. Sales couldn’t do a thing about this, but people were so focused on the number, they forgot to understand why.
It sounds crazy, but this happens too often. We lose site of what the numbers mean.
See the numbers and our performance against them are just indicators. When we aren’t attaining our goals, it’s important to understand WHY. What are the underlying reasons, what is preventing us from making the goals, what might we do to eliminate those root issues? We establish goals based on what we think should be happening, what we should be doing, and what levels of performance we should be achieving. When we aren’t achieving the goals, when our numbers are off, these are warning signs. These warning signs mean we should be looking and underlying reasons. Have things changed, are there problems we should be addressing, are the goals appropriate or should we change the goals.
The numbers are important–but primarily because they are the indicators of underlying problems, challenges or opportunities. If our focus in only on achieving the numbers, and we fail to look at the underlying reasons, then we will only move further off course.
We do that as individuals. We forget why we established certain goals, in the rush of every day business, we get on auto pilot, failing to stop and take the time to understand why we aren’t making our numbers—we just blindly chase the numbers.
As managers, too often our focus on our people numbers loses focus. We demand that people hit the number, we coerce, cajole, persuade, threaten when people aren’t making the numbers. We forget the numbers are indicators, we forget to look at why people aren’t making the numbers. In the example above, it wasn’t the sales person’s fault. He wasn’t responsible for getting leads, he was responsible for following them up and nurturing them. He wasn’t “hitting the number” because he didn’t have enough leads. Our jobs as managers is to help our people achieve their goals—removing or solving problems, helping develop new skills, changing bad habits.
The numbers aren’t ends, they are just means for us to understand performance–our own, our people’s. Are you using the numbers properly?
Coincidentally: I just finished reading “The Goal”. It’s a business book all about setting up the right measurements for your business and targeting those.
Nurturing relationships with your customers is often about giving them information they request–instead of information you want to share. Lots of people aren’t doing content marketing very well.
First, you need to know your customer and what kind of information they really appreciate. Knowing how to do this in your own business can be tough without an external perspective.
Great input!
As you have eluded to in the article, numbers are
really the diagonsitcs of mangement or self
managment.
They allow us to see by indicator that something
may be wrong. They help us identify problems
that can be corrected.
However, few use them correctly. And even fewer
have the right mindset in dealing with them.
The correct approach is as follows:
The Number: Number of calls made
A both misunderstood and feared statistic. Most
sales and management beleive this a bad number
to put emphasis on.
But it measures “productivity.” Most salespeople
are terribly inefficient and thus this is a very
important number as it can usually be improved
by 20, 30 even 50 percent.
This rarely happens because it is not approached
correctly.
It is not about raisng the number — forcing or
pushing others to make more calls.
It’s about finding out what is preventing them from
doing so and then removing that obstacle.
Though it shouldn’t be, the focus on getting more
calls is associated with decreasing the quality of
those calls — an absolutely stupid concept.
However, the concpet of removing barriers to being
more productive and thus making more calls
because you have more time is quite a different
thing.
Most people and sales managers spend ZERO time
removing barriers to selling time.
But the fact is, that for most groups a good 30%
improvement in results is probably possible with this
action alone.
Flyn, thanks for the great insight and joining the conversation. Your point is outstanding. The number is just a starting point, yet too many use it as the end point. To maximize performance and the development of their people, managers need to look at the root causes, addressing those issues.
Thanks for the great illustration!