Whether you plot the evolution of quota attainment over the last few years (CSO Insights) or you prefer to plot sales forecast accuracy as a metric to express sales performance and compare this with the trend of spending on CRM systems over the same period of time (Gartner), you will be in for a surprise. Where you might expect causation (CRM investments improve sales performance), you will not even be able to see a positive correlation.
There is less data available on spending on sales training. If sales training followed the general trend of corporate training over the last few years, there is no positive correlation to be found between that trend and sales performance either. Although there are studies (e.g. CSO Insights) reporting some positive correlation between sales training and sales performance improvement. But it is only for a small percentage of firms which seems not significant enough to break the overall pattern. There is other data available (Objective Management Group) showing that on an aggregate level, despite massive training investments, capabilities of sales people, in certain domains, have even decreased. Furthermore, there is an abundance of anecdotal evidence that generalized sales programs have a low yield of performance.
It looks like sales leaders are doing the same thing over and over again (investing in systems and generalized sales programs) and expecting different results (higher sales performance). This is Einstein’s definition of insanity. Einstein also recommends some remedy: “No problem can be solved by the same level of consciousness that created it. You must learn to see the world anew.”
Is there a way sales leaders can see their world anew? Karen Flaherty, in her contribution “Strategic Leadership in Sales’” in “The Oxford Handbook: Strategic Sales and Sales Management” sees a necessity for a ‘systems’ perspective rather than a ‘best practice’ approach to sales leadership.
‘Best practice’ approach
The ‘best practice’ approach is at the heart of most sales training content and sales technology. These ‘best practices’ are deducted from studies showing positive correlation between particular approaches and improved sales results. To be considered statistically relevant, these studies aim at having a high number of respondents from a wide industry spectrum and with a high geographical diversity. In my view studies conducted in this manner identify ‘most commonly used’ practices, which is not the same as ‘best practices’.
Selling being very situational, the question then is: How well do these ‘most commonly used’ practices fit in a particular context? Frank Cespedes in his book “Aligning Strategies and Sales” reports on a finding about star performers changing employers. Despite staying in the same industry they never got back to the performance level they had with their previous employer. It is estimated that 50% of the performance of sales people depends on the context they are working in. ‘Most commonly used practices’ disguised as ‘best practice’ initiatives are therefore less successful than anticipated.
The ‘system’ perspective
I personally use ‘system thinking’ to get a ‘system perspective’. The lacking positive correlation between investments to improve sales performance and the actual improvement of sales performance can be seen as being on the pattern level in ‘system thinking’ terms. Beneath this level we find the ‘structure’ level. Implementing sales training programs and tools can be considered as initiatives changing the design on the ‘structural’ level.
Improving sales performance requires transformational initiatives (the behavior of sales people and sales leaders needs to change). This happens on the ‘mental model’ level of the ‘system thinking’ model. The ‘system thinking’ model is often illustrated with an iceberg model. The ‘mental model’ represents the part of the iceberg deepest in the water. Figuratively speaking, it is dark and very cold if you dive down there. So it is no surprise that leaders hate having to dig that deep for understanding and breaking ‘undesired’ patterns.
Often applied ‘system’ thinking level by management
Many leaders do not even go to the ‘pattern’ level. They remain on the ‘event’ level (the visible part of the iceberg) and react directly on the events they observe. When they detect ’undesired results’ of sales performance, there standard remedies are: either fire sales people or sales managers, investing in mostly generalized training programs for the sales people or investing in new sales tools to be used by the sales people. Sales management is rarely considered in such initiatives; leaving them the option to continue doing the same old thing. The only way for such initiatives to become sustainable is though the active involvement of sales managers as coaches. This cannot be achieved without enabling sales managers to step up into this role.
‘Lean’ principles to the rescue
‘Undesired results’ (UDR) is a term used by ‘lean’ practitioners. The ‘lean’ concept comes from manufacturing. Sales is a totally different world, isn’t it? There are practitioners applying ‘lean’ concepts to sales and marketing organizations producing impressive improvements of results. Instead of reacting to events with initiatives which take long time to implement and show rather mediocre results, they focus on continuous improvement of the daily work of sellers and sales managers. With the help of systems thinking, root causes of UDR’s are detected and based on these insights, theories of improvements are defined. These theories are then immediately put in practice and their effects are being measured. They focus on small chunks having the most immediate impact on performance and being easily implementable. This leads to early success which is a good motivator for any transformation initiative.
Applying the ‘lean’ approach to sales makes trainings specific to the particular sales force (in opposite to generalized sales programs). Learning happens in digestible chunks. Fighting the forgetting curve of standardized sales programs is not needed. Each puzzle piece added is easily adopted into the daily work of sales managers and sellers because their positive effect becomes immediately visible. If no improvement can be seen, the puzzle piece is immediately reworked or considered as not causal to for the addressed UDR. Organizations applying the ‘lean’ concept are continuously experimenting which is considered a prerequisite to attain causation between behavior and results. Implementing a lean concept is less risky than investing in the next organization wide generalized sales program or a new sales tool. You don’t need to wait months or even years and to invest huge sums of money hoping for a positive outcome at the end of the initiative. As the figures show, the likelihood for this to happen is rather slim.
“Hope is not a Strategy”
In 2009, Dr. Akande, an economist, scholar, and the Dean of the Business School at Webster University in St. Louis used the phrase “Hope Is Not a Strategy” as the title of his letter to President Obama. The main goal of the letter was to advise President Obama how to bring life back into the economy of the United States. Could this also be true for bringing back life to sales performance?