Motivating Salespeople: What Really Works

Sales executives are always looking for ingenious ways to motivate their teams. They stage grand kickoff meetings to announce new bonus programs. They promise exotic trips to rainmakers. When business is slow, they hold sales contests. If sales targets are missed, they blame the sales compensation plan and start from square one.
The finance organization, meanwhile, views the comp plan as an expense to manage. That’s not surprising: Sales force compensation represents the single largest marketing investment for most B2B companies. In aggregate, U.S. companies alone spend more than $800 billion on it each year—three times more than they spend on advertising. So naturally finance tries to ensure that comp plans have cost-control measures designed into them. Some companies offer flat commission rates so that compensation costs rise and fall with revenues. Others cap compensation once salespeople hit certain performance targets. Still others use bonuses to control spending by pinning salespeople’s quotas to Wall Street revenue targets. 

But a few progressive companies have been able to coax better performance from their teams by treating their sales force like a portfolio of investments that require different levels and kinds of attention. Some salespeople have greater ability and internal drive than others, and a growing body of research suggests that stars, laggards, and core performers are motivated by different facets of comp plans. Stars seem to knock down any target that stands in their way—but may stop working if a ceiling is imposed. Laggards need more guidance and prodding to make their numbers (carrots as well as sticks, in many cases). Core performers fall somewhere in the middle; they get the least attention, even though they’re the group most likely to move the needle—if they’re given the proper incentives.

Accounting for individual differences raises the odds that a compensation plan will stimulate the performance of all types of salespeople. In this article we will discuss how companies can do this to deliver greater returns on investment and shift their sales-performance curve upward.
Motivating Core Performers Ironically enough, many incentive plans come close to ignoring core performers. Why does this group tend to be off the radar screen? One reason is that sales managers don’t identify with them. At many companies the managers are former rainmakers, so they pay the current rainmakers an undue amount of attention. As a consequence, core performers are often passed over for promotion and neglected at annual sales meetings. But this is not in the best interest of the company. Core performers usually represent the largest part of the sales force, and companies cannot make their numbers if they’re not in the game. Here are some proven strategies for keeping them there.
 
Multi-tier targets. A project that Mike recently worked on with a national financial services company shows that such targets help motivate core performers. At the company a major proportion of the salespeople fell into this category. In bearish months they almost always found a way to hit their targets, but in bullish months they seldom exceeded their numbers substantially. In an effort to nudge them upward, the company experimented with tiered targets.
 
The first-tier target was set at a point that a majority of the company’s sales agents had historically attained, the second-tier target at a point reached by a smaller percentage of the sales force, and the third-tier target at a point hit only by the company’s elite. All the firm’s agents were divided into two groups: The first was given targets at tiers one and three, and the second group got targets at all three tiers. The hypothesis was that tiers would act as stepping stones to guide core performers up the curve.
The tiered structure indeed had a profound impact. Core performers striving to achieve triple-tier targets significantly outsold core performers given only two tiers. By contrast, multi-tier targets did not motivate stars and laggards as much: No significant differences in performance were found for those segments.

THE MANAGEMENT TIPS

1. Don’t Listen to Customers — Observe Them

Every business wants to know what influences their customers. So, they should just ask them, right? Not so fast. There’s a fundamental problem with asking people what will persuade them to change: Most of the time they won't know the answer. It's not that they won't give one. They'll give you plenty. But those answers are likely to be wrong. Asking someone to pinpoint what will influence them in the future is a bit like saying, "Tell me how you will behave when you are not thinking about what I have just asked you about." Instead of listening to your customers, watch them. Set up small field tests and controlled studies that observe what they actually do. In most instances, these experiments will be lot cheaper than traditional market research, and the insights will be much more revealing.

2. Prepare Stories for Your Job Interview

Don’t show up for a job interview without a stockpile of good stories. These narratives should be parables with a moral at the end, showcasing the skills that are relevant to the position you’re applying for. Make your stories do double duty: They should illustrate the good job you’ll be able to do for the company. And they should show that you’re loyal, trustworthy, or hard-working — some personal quality you need to get across. Be sure to have a failure story at the ready. Don’t cheat and talk about your tendency to “work too hard.” Pick something real that you were able to learn from. This will magnify you in the interviewer’s mind, not diminish you. There’s a good chance the interviewer will ask you to talk about a weakness or a failure, anyway — it’s better to be prepared than to come up with a unpolished response off the cuff.

3. Before Your Next Salary Negotiation, Do Your Homework

It’s important to have realistic expectations before negotiating a salary offer. Employers base salaries on what they currently pay to fill similar roles and what they believe competitors are paying. They may also have a predetermined range or other budget constraints. Find out what people usually make doing the job (including at the hiring organization) by searching websites such as Salary.com, Vault.com, and PayScale.com. And reach out to people in your network who can give you insight — somebody you trust inside the organization, a career adviser, a search consultant, contacts in the same industry. Compare their feedback — don’t rely on one source.

4. Know When It’s Time to Quit Your Job

Quitting a job can have negative consequences on both your career and your bank account. But staying in a bad situation can be worse. Here are three tips for deciding if it’s time to go:

• Assess your dissatisfaction. Start by figuring out whether you lack excitement about the bigger picture or the day-to-day activities. You may be able to change the latter but it’s hard to do anything about the former.
• Look at other options. Don’t leave on an emotional whim. Even if you’re unhappy, take time to see what else is out there. Compared to realistic alternatives, maybe your situation isn’t so bad.
• Test your assumptions. Run a few experiments to assess whether your perception is reality. For example, put your hat in the ring the next time your boss has a high-profile piece of work to be done. If you're overlooked, he might not appreciate your skills and it may be time to move on.

Six Components of a Great Corporate Culture

The benefits of a strong corporate culture are both intuitive and supported by social science.

But what makes a culture? Each culture is unique and myriad factors go into creating one, but I've observed at least six common components of great cultures. Isolating those elements can be the first step to building a differentiated culture and a lasting organization.




1. Vision: A great culture starts with a vision or mission statement. These simple turns of phrase guide a company's values and provide it with purpose. That purpose, in turn, orients every decision employees make. When they are deeply authentic and prominently displayed, good vision statements can even help orient customers, suppliers, and other stakeholders. Nonprofits often excel at having compelling, simple vision statements. The Alzheimer's Association, for example, is dedicated to "a world without Alzheimer's." And Oxfam envisions "a just world without poverty." A vision statement is a simple but foundational element of culture.


2. Values: A company's values are the core of its culture. While a vision articulates a company's purpose, values offer a set of guidelines on the behaviors and mindsets needed to achieve that vision. McKinsey & Company, for example, has a clearly articulated set of values that are prominently communicated to all employees and involve the way that firm vows to serve clients, treat colleagues, and uphold professional standards. Google's values might be best articulated by their famous phrase, "Don't be evil." But they are also enshrined in their "ten things we know to be true." And while many companies find their values revolve around a few simple topics (employees, clients, professionalism, etc.), the originality of those values is less important than their authenticity.


3. Practices: Of course, values are of little importance unless they are enshrined in a company's practices. If an organization professes, "people are our greatest asset," it should also be ready to invest in people in visible ways. Wegman's, for example, heralds values like "caring" and "respect," promising prospects "a job [they'll] love." And it follows through in its company practices, ranked by Fortune as the fifth best company to work for. Similarly, if an organization values "flat" hierarchy, it must encourage more junior team members to dissent in discussions without fear or negative repercussions. And whatever an organization's values, they must be reinforced in review criteria and promotion policies, and baked into the operating principles of daily life in the firm.


4. People: No company can build a coherent culture without people who either share its core values or possess the willingness and ability to embrace those values. That's why the greatest firms in the world also have some of the most stringent recruiting policies. According to Charles Ellis, as noted in a recent review of his book What it Takes: Seven Secrets of Success from the World's Greatest Professional Firms, the best firms are "fanatical about recruiting new employees who are not just the most talented but also the best suited to a particular corporate culture." Ellis highlights that those firms often have 8-20 people interview each candidate. And as an added benefit, Steven Hunt notes at Monster.com that one study found applicants who were a cultural fit would accept a 7% lower salary, and departments with cultural alignment had 30% less turnover. People stick with cultures they like, and bringing on the right "culture carriers" reinforces the culture an organization already has.


5. Narrative: Marshall Ganz was once a key part of Caesar Chavez's United Farm Workers movement and helped structure the organizing platform for Barack Obama's 2008 presidential campaign. Now a professor at Harvard, one of Ganz's core areas of research and teaching is the power of narrative. Any organization has a unique history — a unique story. And the ability to unearth that history and craft it into a narrative is a core element of culture creation. The elements of that narrative can be formal — like Coca-Cola, which dedicated an enormous resource to celebrating its heritage and even has a World of Coke museum in Atlanta — or informal, like those stories about how Steve Jobs' early fascination with calligraphy shaped the aesthetically oriented culture at Apple. But they are more powerful when identified, shaped, and retold as a part of a firm's ongoing culture.


6. Place: Why does Pixar have a huge open atrium engineering an environment where firm members run into each other throughout the day and interact in informal, unplanned ways? Why does Mayor Michael Bloomberg prefer his staff sit in a "bullpen" environment, rather than one of separate offices with soundproof doors? And why do tech firms cluster in Silicon Valley and financial firms cluster in London and New York? There are obviously numerous answers to each of these questions, but one clear answer is that place shapes culture. Open architecture is more conducive to certain office behaviors, like collaboration. Certain cities and countries have local cultures that may reinforce or contradict the culture a firm is trying to create. Place — whether geography, architecture, or aesthetic design — impacts the values and behaviors of people in a workplace.
There are other factors that influence culture. But these six components can provide a firm foundation for shaping a new organization's culture. And identifying and understanding them more fully in an existing organization can be the first step to revitalizing or reshaping culture in a company looking for change.



Ref:- http://blogs.hbr.org/cs/2013/05/six_components_of_culture.html