Recently, I read a blog where the writer talked about sales leaders who obsess over activities over results. He was lamenting the fact that measuring activity has become quite common and he thought it was wrong. This got me thinking as I agree with him and disagree with him.
Sales leaders have to own their sales number. There is no question on that. But, what they understand is that it is impossible to actually manage the number. You can manage TO the number, but not manage the number itself. This is where Deming was wrong when he said “If you can’t measure it, you can’t manage it.” It is impossible to manage an outcome. Too many people don’t understand causation and the relationship between activities and results.
It works like this:
- What is the business result I want to accomplish, e.g. $10 million
- How will I accomplish it? (Objectives), e.g. 100 deals with an average deal size of $100k.
- What are the activities that will accomplish the objectives
I need to know what my goal is, the result. Then I need to decide how I am going to accomplish that result, the objectives. Then what activities are required to accomplish those objectives.
Here’s an analogy. Let’s say I weigh 220 lbs. I think I am too heavy and decide to lose 20 lbs. Two hundred pounds is my goal, the Result. The first step is to decide how I am going to lose the weight. So, I set objectives of: eat at least ten salads a week and get 200 minutes a week of aerobic exercise. Now, what are the activities I need to do to accomplish those objectives? Well, to eat ten salads a week I need to go shopping at least twice a week and I need to buy the right greens, then I need to plan my meals, etc. To get the aerobic exercise I need to put it into my schedule, maybe join a gym, buy some running shoes, and actually do the exercise. I set those activities because I know, from empirical evidence that eating right and exercising more will result in weight loss. You, as my manager can monitor my activities, number of shopping trips, number of meal plans, number to times to the gym and number of minutes on the treadmill.
Where a lot of people go wrong is that they don’t understand causation. In my weight loss example, I know that eating right and exercising will help me lose weight. Too many sales leaders set arbitrary activity goals, 25 outbound phone calls a day, 25 email, 5 in-person meetings without doing the hard work to determine if those are the right activities. If you don’t understand cause and effect, you are not a good sales leader.
One of my clients is a subsidiary of a very large holding company. The CRO of the holding company established an arbitrary metric of ten in-person meetings a month for all sales reps of the subsidiary. We thought this was unreasonable and unrealistic, so, we did an analysis and found out that there was no correlation between in-person sales calls and wins. In fact, the number was the same for both wins and losses. Instead, the metric that was important was when the sales rep had made contact with, and established a relationship with the economic buyer. This had a statistically significant higher win rate. So, we set metrics and goals for the sales rep around the activities that would achieve this objective: all in-person meetings required a call plan with detailed, prepared questions that would help us understand buying roles, required opportunity pursuit plans. We also set goals for the sales manager around number of coaching sessions per week, etc.
So, obsessing over activities? Absolutely, if they are the right activities. You must do the hard work to figure out cause and effect. If you don’t, you will be sending your people on a fool’s errand. Without understanding cause and effect you are essentially saying to your team “There’s the goal, take any sub-optimal route you want to get there, but get there.”
Instead, you want to tell them “There’s the goal, we’ve done a lot of work to help you take the most optimal route to get there. Now, go do it!”
If you like this article, please follow me and look at some of my other articles:
- “Three key questions every sales leader should ask and every rep should be able to answer” http://tinyurl.com/3keyquestions
- “What this really means: Sorry I didn’t get back to you, I’ve been really busy” https://tinyurl.com/HatcherLinkedin5
- “Did you know that you products have no benefits” https://tinyurl.com/HatcherLinkedIn4
- “Why account management may be the core customer activity.” https://tinyurl.com/HatcherLinkedIn3
- “What it means to be a world class sales organization” https://tinyurl.com/HatcherLinkedIn1
- “So you want to be a trusted adviser to your clients?” http://tinyurl.com/zsoazz7
- “Learning to sell from a 16-yr old beach vendor in the Dominican Republic” http://tinyurl.com/beachvendor
#sales, #selling, #salesleadership, #CXO