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Pipeline Games

by David Brock on February 9th, 2014

I’m always amused by the games that go on as managers conduct pipeline and forecast reviews.  Data shows sales people spend at least two hours a week on pipeline and forecast reviews.  Think of it, 5% of the sales organization’s time in some of the most confusing and useless discussions I’ve seen.  If we learned how to do these effectively, we could not only improve the quality of these reviews and information, as well as significantly reduce time spent in reviews.

Here’s a scenario I run across too often:

The first line sales manager sits down with the team collectively or individually to review the pipeline and forecast.  Sometimes the conversation looks like:

Manager, “What do your pipeline and forecast numbers look like for this month/quarter?”

Salesperson, “What number do you need me to commit to?”

Manager, “We’re really getting pressure for this…..  What deals can you pull in and make happen?”

The conversation goes on until they agree on a set of numbers to present to management.  Sometimes, they might actually look at the CRM pipeline, but too often, the “numbers” that are agreed upon are separate from what the CRM data shows.

Then the manager, assembling all the data, gets ready for a meeting with his manager.  He doesn’t want to overcommit, he knows some of the sales people on the team are a little optimistic, some are pessimistic, so in preparing to review the number with his manager, he “adjusts” them from the agreements he has reached with his people.

He sits down with his manager, presents his numbers and the deals his folks have presented.  The discussion goes back and forth, the manager typically pushes back and challenges, they end up negotiating and agreeing on a number.

That manager now needs to go to her boss, doing the same thing.  This goes on all the way up the food chain, everyone adjusting their numbers based on the discussion, being conservative, and hedging the judgments of their people.

It gets to the top sales executive.  By that time, the numbers have been massaged and adjusted through all the levels of reviews on their journey to get to the top of the food chain.  There, all sorts of things might happen.  If each level has decreased the commitment, by the time it reaches the top levels, the pipeline and forecast are frighteningly low.  Panic set in, new decrees to build the pipeline, to lock in more deals, and so forth cascade back down to the sales people.  In this latest “crisis,” they immediately drop everything, respond to the panicked messages, wonder, why the original pipeline and forecast weren’t good enough, but shrug their shoulders and go on.

It seems the longer the path length from the sales person to the top management, the more distorted the pipeline and forecast get, as each person adjusts the numbers for their “reality.”

There are any number of games we play in this process.  So we see fire drill after fire drill, going on, each taking huge time from all people involved.

Having gone through this experience, in the next month, particularly if the number was missed, we go through the same cycle again, except everyone is making more adjustments, adding their own “English” to the pipeline as they go through the process one more time.

They try to increase the accuracy, by tweaking all the data based on their “judgments” and conservativism.  Instead, we should be focusing on pipeline integrity and forecast accuracy.

But none of this addresses the issue of pipeline and forecast accuracy.  To have highly accurate pipeline’s and forecasts, we have to start with high integrity pipelines and well defined criteria for forecasting deals. Without this, everything’s just a guess–that’s why we waste so much time in looking at pipelines and forecasts.

The foundation of a high integrity pipeline is the sales process that sales people use.  The sales process tells you where the deal is in the pipeline and how it’s moving.  Manager’s in reviewing pipelines with their people must focus on pipeline integrity.  Are the deals placed correctly, based on where they are in the sales process?  Remember, a pipeline review is has completely different objectives than deal reviews.

Once we have verified that all deals are correctly positioned in the pipeline, we have the foundation to a high integrity pipeline.  Managers can focus coach the pipeline focusing on shape, volume, and velocity.

We also need to have clear criteria forecast criteria, that is, “what conditions must a deal satisfy to be committed to the forecast?”  Too often, we commit things to the forecast based on sales person efforts to close a deal by a certain time, rather than when the deal is going to be closed.  Whenever, we start hearing language like, “blood commits,” “pinky swears,” and so forth, we are implicitly basing the forecast on sales effort rather than buyer readiness.

Ideally, we want a buyer verified forecast.  Now, we can’t do forecast reviews with them, but we can established criteria based on the buyer activities and decision making process, rather than our efforts to get the order.

First line managers need to be driving these two activities with their people.  If they are executing this well, the pipeline reporting/management and forecasting process are very simple.  There should be no difference between what the sales people report and what senior management sees.

All those interim meetings and “negotiations” go away.  Conversations change from negotiating the number to determining what do we need to do about it.  Everyone has a single consistent view, there is no translation loss or adjustment.

Let’s stop the games.  Let’s focus on making sure we have high integrity pipelines and forecasts driven by buyer data.  We’ll save huge amounts of time and focus on the issues most critical to driving business volumes.

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  1. Isn’t this where you should have some sceince in your pipeline e.g. know the number of deals, average deal value, win rates and velocity? Then you can calculate with a degree of accuracy (at any level) what you’re likely to hit…

  2. John Sterrett permalink


    I loved this one. Often the pipeline discussion is like the old game of telephone we played as a kid – and the pipeline at the end of the line looks nothing like what was originally communicated.

    Of course, part of the problem arises when everyone involved in the discussion is compensated in a different way. Sales people sandbag because if they negotiate a lower number, they get big compensation when they blow it out of the water. Sales Managers are looking to move up the chain, so they are adjusting the numbers up both to counteract the sandbagging and to make themselves look like ‘growth creators’. Upper management’s stock options are worth more if the stock price goes up, so they will report whatever will result in a rise in expectations and a commensurate rise in the stock price, however temporary.

    Then there are those companies that engage in the discussion disingenuously, wasting everyone’s time all up the chain, because there is a top line number that will be disseminated and flow down the chain anyway. What a waste of time and a morale killer, leading the sales staff to believe that their input actually means something, only to be told, “the number is the number, deal with it”.

    I am fortunate to work for a company that vets its new hires brutally on the front end to make sure they have the right fit, and then compensates them well, and adds in bonuses when they beat the number. But sometimes circumstances change and they adjust the forecast numbers up or down in accordance with feedback from the field. Yeah, the field is still stuck with the budget number most of the time, as an annual process, but since a smaller part of their compensation is based on ‘beating the number’, there is more integrity in the pipeline forecast process.

  3. Ron Garland permalink

    No kidding! I’ve been on the receiving end of these pipeline reviews for over 30 years as I made the decision early in my career to remain an individual contributor rather than to go into sales management (OK, I lost my head twice during that period and went into sales management, much to my future dismay). But I digress…

    Now, at age 66, I can say without reservation that the least enjoyable part of my job are the weekly pipeline reviews (yes, even worse than cold-calling).

    As a career bag carrier, I would like to say to all you sales managers out there, please try to make it through just ONE pipeline review without saying one of the following and you will become an instant here to your sales team:

    1. How can we bring this deal into this quarter?
    2. We need to increase the probability of this deal to XX%.
    3. You don’t have enough in your pipeline.

    Instead, do as Dave has suggested and set firm pipeline criteria that everyone must agree to and execute on. Then just let the chips fall where they may.

    OF COURSE, it will lead to other conversations such as…

    1. Are you sure you’re doing the amount of prospecting you should?
    2. I don’t get enough leads!
    3. Marketing sucks.
    4. My territory sucks.
    5. The product sucks.
    6. I don’t think you know the products well enough.
    7. I need to help you do a better job qualifying opportunities.

    But those are merely the beginning of more productive conversations which should have no place in the pipeline reviews.

    Just my two cents…

    • Love the comment Ron! I think too many of our conversations really don’t focus on the right issues–in fact they are less conversations and more directives. They need to be more collaborative (and it’s OK to whine a little) focused on how to improve. Thanks for the great comment!

  4. Sanjiv permalink

    Hi. Nice post Dave. Thanks.

    How are the forecasts for low value jobs different than high value jobs forecasts. The criteria could be different too.In case the forecast is a mix of small and big jobs, how should it be handled?

    Thanks again

    • Sanjiv, there’s no short answer to your question. I don’t think the difference is driven by deal size/value, but more by the buying process and even the type of purchases. For example a transactional buying process (may be very high value) is different from the complex buying process (may be significantly lower value). Transactional processes can sometimes be forecast more easily, leveraging analytics, historical run rates, good demand planning, etc. Complex buying processes are much more difficult, regardless of the value.

      Try searching the blog on Forecasting. I’ve written a number of posts on this topic. Thanks for the great question. Regards, Dave

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