I wrote “Sales Managers Only Have One Real Goal.” It stimulated a lot of thoughtful conversation. Christian Maurer shared a particularly astute, and troubling observation:
“I am afraid though that many high level executives might not share this view. In the name of shareholder value they are still chasing after the number and forcing first level sales managers to do the same.”
Sadly, I think Christian’s right. Too often, we’re focused on chasing the number. We define everything we do as managers around the number. But this focus shows a real misunderstanding.
Our attainment–making our numbers, achieving goals are outcomes of what we do, how we focus, the priorities we set and many other things. We can’t focus only on the outcome–the numbers. Continually harassing managers and sales people on the numbers is similar to the old quote, “The beatings will continue until morale improves.”
If we are to make our numbers, we have to focus our time and efforts on what produces those outcomes–not the outcome itself.
As leaders, we have fundamentally 3 levers: Time, Resources (generally thought of as money), and People.
We can’t do much about time–except make sure we don’t waste it: our own time, that of our people, our customers, our organizations. Everything we do must be focused on maximizing our impact in the time that we (collectively) have.
Resources, those are all the things we invest in or spend money on. They can be tools, systems, programs, training, processes. We may buy services and capabilities from others. They are things that help us, our people, and our customers achieve the desired outcomes (e.g. making our numbers.)
People, the only way we get anything done is through people!
We can’t make the number, only our people can!
Our jobs, as managers, are providing our people the resources, eliminating the barriers/roadblocks, and helping them use their time most effectively to achieve our shared goals and produce the desired outcomes. (That pesky “making the number” keeps cropping up.)
We use our time most effectively (not to mention everyone else’s) when we focus on those things that create the desired outcomes–not on the outcome itself.
We measure our effectiveness at doing those things by the outcomes produced. If we aren’t making the number, then somehow, we aren’t getting the time, resource, people equation right.
Shareholder Value is an outcome. We try to increase Shareholder Value in many different ways.
The importance of the Sales ‘number’ and its relationship to Shareholder Value is a heuristic.
A much more effective model is to Balance the Sales Number amongst several other ‘Scores’. A portfolio of measures, enables a short, medium and long term view on BOTH Sales Numbers and Shareholder Value.
Conveniently, we don’t have to invent a ‘Portfolio of Measures’, as Norton and Kaplan’s Balanced Scorecard offers the Executive [and non-executive] Boards a systematic approach.
The Sales “number” still appears, however it is balanced by Customer/Product/Market perspectives, Employee perspectives [inc. learning and growth], Internal Processes [and external] perspectives.
Sales Managers should be measured on a portfolio of measures, not just their current [which means their past] performance, but also their likelihood to deliver FUTURE performance.
Outstanding! The portfolio of or measures is such a critical concept. Having the right portfolio of metrics ensures we have both the right tactical focus and can maintain it over time. The tragic thing is too many managers, when they aren’t making the numbers, abandon managing the portfolio, focusing only on one thing. While it make work once or twice, it’s not a recipe for sustained performance. Thanks for the great comments Brian!
Yet another insightful article, Dave. I have come to expect nothing less from you. You make an excellent point here. Managers are often the liaison between shareholders and employees. If these managers simply chase numbers they are ignoring a significant portion of their job! Managers should be managing, collaborating with and engaging with their teams. Simple as that.
Ken Schmitt
http://www.turningpointsearch.net
Thanks Ken.
Ken, thanks so much. Hope I continue to live up to your expectations. The only way managers get things done is through their people. Not focusing on them is the sure route to the personal failure of the manager, and the potential failure of the team/organization.