Performance Management Friday — Sales/Management Alignment

In this week’s post on performance metrics, I’ll take a step back.  Rather than looking at a specific metric, I’ll spend a little time talking about the differing points of view on metrics—the sales person/individual contributor’s view and sales management’s view.

Too often, these are viewed as being conflicting.  Sales people resist metrics because management uses them as a club on performance.  This happens more than we’d like to think, it’s really terrible management practice.  Rather than discussing this, let me focus on how sales people and managers should really be on the same page.

As individual contributors, or managers, we the reason we put metrics in place are: 

• Establishing goals we want to achieve.
• Establishing measures or milestones that indicate whether we are on the path to achieve out goals.

Metrics provide us a “control system” to help make sure we are on target.  As sales people, we want to make sure we are “in control,” that we are pursuing enough opportunities to make our numbers, that we are expanding our presence in the territory, that we are satisfying our customers or whatever.  At an individual level, metrics provide us personal alerts.

Likewise, managers need to know that we are “in control,”  that each team member is in control, the team is in control, rolling up through the organization.  Management has the need and right to know what’s going on, to have alerts when things are going off target.

There should be no lack of alignment in the necessity, purpose and use of metrics between management and sales people.

So where do the problems arise?  In my experience they arise in a few areas.

First, while the measure that individuals and managers may be looking at may be the same, the actual goal is not useful to the sales person.  For example, number of customer meetings/calls per week is one where there is lots of misunderstanding.  Managers may establish an arbitrary number–the same number for everyone.  However, everyone’s territories are different, the number of leads converted into opportunities will be different.  One may need to have 10 a week, another may need 15 a week, and another may need 20.  Establishing an arbitrary number of  20, for example, is meaningless–and ultimately not helpful to any of the sales people and manager.  Likewise, arbitrary funnel “coverage” numbers cause problems.  Some companies require 2-3 times quota as the “right number of opportunities” in the pipeline.  Last week I met with a team having an average close rate of 70%, yet management still required them to have 3 times coverage—they were justifiably upset.

The tools are available for sales people and managers to analyze things and to establish individual goals that are meaningful to each sales person.  Not taking the time to understand performance at an individual level, establishing the goals that are appropriate for each person and territory is wrong and drives a wedge between sales and management.  This is really a management problem.  Management must take the time to understand differences between sales people and territories, jointly establishing meaningful metrics.

Another related area is the way management uses metrics.  Metrics are guideposts, alerts.  They help you understand if you are on target or if you need to take corrective action.  Using them as a club doesn’t help the sales person and doesn’t resolve the problem and provides no value to the sales person.  Management needs to work with the sales person, understanding what the issue is, helping the sales person overcome the issue, whether it’s getting additional resources, coaching, whatever. 

Another area, the final for this post, is sales people don’t recognize managemen’t legitimate need for information.  Most sales people are fiercely independent.  They don’t like others “looking over their shoulders.”  They keep information to themselves for varieties of reasons.  But sales is the engine that drives the company.  Management needs to understand what’s happening, they need to establish an outlook and set expectations for everyone else in the company.  It’s part of a sales person’s job to keep management well informed, to avoid surprises.  Everyone knows the challenges of selling and how things may change.  Witholding information, or providing inaccurate information is doing the company a disservice.

There should be absolutely no conflict between management and sales on metrics.  There should be absolute alignment.  Metrics that are critical to helping a sales person stay on target are the same management needs–they take the roll-ups.  As with so many things, any “conflict” is probably a lack of good communication between sales and management, and an inability to understand each other’s perspectives.