NEWS May 2015 / ARGO news Nr. 22
is not an Option. ON
Sales is not a “Maybe” Business!
This is the statement we often make when discussing the topic of Sales Management with our clients. It usually comes up after we ask the sales team these three questions: 1. What is your target for this year? 2. What is your current degree of target achievement? 3. Will you achieve the target at the end of the year?
that might help you to better plan your sales and increase the probability of reaching your targets. These three simple questions usually show how well a sales organization is managed. If sales people cannot answer the first two questions on the spot and have to look into their data, it is perfectly clear that the topic of results is not a focus of discussion very often in their everyday sales life. That, in turn, usually implies that sales management is not giving coherent or consistent feedback regarding results to their people, and, consequently, that they are not keeping it in their focus. In more developed sales organizations, people are usually able to answer these first two questions without hesitation. At the third question you often run into a problem. We experience answers such as: “I don’t know”, “I hope so!”, “I’m not sure”, “It depends on…”, “Who knows?”, or “Maybe!” And this is where we need to get straight to the point: Sales is not a “Maybe” Business! With good sales management, people will give better answers to all 3 questions, based on a better grasp of the sales business. How would your people answer? How do you? Let us share a few ideas about sales management
Planning sales is all about planning on the right levels. There are 3 main levels: First is the LEVEL of RESULTS. Imagine your last year’s sales results were 100 and that you are now planning the sales target for next year. What will the target be? If you are planning on the Level of Results you have some strategies at your disposal: 1. The “Excel” strategy: This means increasing the result achieved last year by a certain percentage, as if using a fixed formula in Excel. “Last year we had a result of 100; this year our target will be 130!” 2. The “Cost” strategy: With this strategy, sales targets are calculated in some relation to the costs the company is budgeting for the next year. “We will have costs of 110 next year; therefore our sales target needs to be 110 plus 20!” 3. The “Adjusting” strategy: In this strategy, sales targets are adjusted in conjunction with the demand of some other organizational goal. “We want to sell our company, and we will get a better price if our sales figure is 130!” Or: “We have
built a new factory, and our team must sell the new capacity; therefore, the sales target this year will be 130!” Regardless the strategy you use, if you are planning on the level of results, you are indulging in “Management by Hope”. On this level of planning,
Resu lt s Analys is Act iv it y Analys is Resou r ces Analys is
• external • internal CO M PANY STRATEGY
Management by Hope
R e sul ts P l an
Management by Fear
Ac ti vi ty P l an
Management by Objectives (MBO)
you can only hope that you will reach the results you have planned. Hope is the only thing you can rely on, because on this level you are not planning based on any factor you or your sales organization can influence. Keep in mind the “Golden Rule of Sales Management”: You cannot manage results, you can only manage what leads to results! Results are generated by activities, and this takes us to the second level of sales planning: the LEVEL of ACTIVITIES. On this level we look at the results from the previous year (100) and ask ourselves: What activities from our sales organizations led to these results? How many customer contacts, customer visits, offers, contracts, presentations, fairs, etc. helped us to achieve last year’s sales results? The logic on this level is pretty simple: If we conduct the same sales activities in the same quantity as last year, how can we expect a rise in sales results? If everything stays the same, we will have, in the best case, pretty much the same results as last year. In reality, if we keep the same level of activity, we will likely have worse results, as markets change all the time and the competition never sleeps.
Deve l op me nt P l an
FU TU R E
Sales Planning Model
The key question is whether we are measuring sales activities, and if so, whether we are measuring the right ones? Without this information on our sales activities, we cannot draw any reliable conclusions between the results we have achieved and activities we have invested in.
What does planning on the Level of Activities look like? In our example it would look like this: Last year we achieved a result of 100 and we did 300 customer visits, 76 offers and got 25 contracts with an average volume of 4. However, our result is not influenced only by the quantity of activities but also by their direction: we know that from our 300 customer visits, 5 were with A customers, 200 with B customers and 95 with C customers. The question is, what changes do we need on the activity level to reach a result of 120 this year? Maybe we should address the question of quantity, such as increasing the number of visits to 360. Or we might change the direction and plan to have a different mix of visits this year with the same quantity of activities (e.g. 100 with A, 150 with B and 50 with C customers). If you plan on this Level of Activities, there is a far better chance of achieving the results you planned. Nevertheless, this level of planning inevitably leads to “Management by Fear”. Fear instantly arises from questions like, “Do we have
enough time or other resources to increase the number of activities?”, or “Are we competent enough to change the direction of activities and intensify communication with more challenging target groups?” These questions might not be spoken out loud, but they will nevertheless influence motivation levels and therefore performance. If you want your planning to become more precise, you must include the third level of planning: The LEVEL of COMPETENCIES. Here, the key question is: which competencies (skills, knowledge, attitude, motivation levels, resources) did my people have when they performed certain activities that brought certain results in the past? For accurate sales planning, we must know these and measure them well. It is crucial to include this level when we are planning results and activities on the previous two levels. For example, if we want to achieve a result of 120 this year (Level of Results), we need to change the direction of activities towards focusing on a different target group (Level of Activities). Further, in order to empower sales people to do more activities towards A clients, we must improve or change their competence level in certain ways (Level of Competencies). Do they have enough business acumen as regards these big companies? Do they have the skills to navigate through complex decision-making processes within the customer organizaton? Do they have the right approach and presence to present solutions to the board members of these companies? If we do not plan in an integrated way and do not make any change on the Level of Competencies, sales people will not be able to perform these different activities, and therefore the likelihood of reaching the planned sales results will be low. That is why we call the addition of this level of planning to the other two levels “Management by Objectives”. One might say this is obvious and not really rocket science, but the question remains:
How would your people answer?
May 2015 / ARGO news Nr. 22
ANDRITZ Sales Empowerment The newly established ANDRITZ Separation business unit has emerged from several years of global corporate growth driven by considerable M&A activities. As a result, the introduction of a uniform sales culture as well as a streamlined approach to greater lead generation and increased cross-selling were decisive for ANDRITZ to leverage their investment in the Separation unit. For the realization of the above goals, a Sales Empowerment project was implemented together with ARGO in Europe, South America and Asia, especially China. The ARGO Sales Empowerment project started with a global Sales Leader Workshop to lay the groundwork for the planned changes within the sales department. At the workshop, the leaders defined KPIs for steering the changes and measuring success in line with the overall business strategy. In consultation with ANDRITZ Separation management, ARGO crafted a Leadership Development Program comprised of three modules. This program combined sales management topics such as Market Segmentation, Planning Sales Activities, and Management by Objectives with leadership topics such as Resonant Leadership, Emotional Intelligence, Behavioral Change, SIZE Personality, among others. In addition, the program also included an internal sales challenge between the different ANDRITZ sales teams. The primary focus and goal of the program was on the application of the newly acquired sales skills and knowledge on the job. To leverage output, the leading sales managers also attended personal coaching sessions. At the close of the project, the sales leaders took part in a Sales Management Audit, where they presented the learnings achieved and the changes made in their organizations and their sales approaches, and most importantly, the changes they made on a personal level that contributed to their success and the support of their team. Of course, there was also the award for best results in the internal sales challenge! This program greatly supports the outstanding sales culture based on which the ANDRITZ Separation sales teams have since been enhancing their success in line with the overall business strategy.
Sabine Pinterits gave us some
Our Christmas donations 2014 were given to Ute Bock. Though still recovering, the energetic founder of the identically named refugee organization and her fundraising colleague
fascinating insights into the activities of her organization. Learn more about this amazing and valuable project on www.fraubock.at and you might want to contribute yourself.
The winner of the wine-making competition for the new ARGO cuvée 2013 is Senior Vice President Production of AirBerlin
Technik, Tobias Hundhausen
He has already got some bottles and at Christmas 2015 the wine will be made available to all of us!
▶ Our ARGO breakfast took place at the beginning of May. The ARGO breakfast offers HR managers the opportunity to discuss matters of importance with colleagues and an expert from ARGO over a nice cup of cappuccino and pastry as the perfect start into the day. In May, the topic was “The tough relationship between HR & Sales: Support, responsibilities & prospects in Sales Empowerment processes”. For more information, please contact firstname.lastname@example.org.
We welcome our new ARGOnaut, Patrick Thom, on board of ARGO Vienna. He is an experienced consultant and we look forward to meeting new challenges together with him!
• The date of this year’s ARGO talktime in Hinterstoder has been fixed: On 29 and 30 October 2015, we will invite you once again to a workshop about challenges and developments in personnel and organizational development. We keep you posted! • On May 28, the Round Table of Gesellschaft für Prozessmanagement takes place again. ARGOnaut Doris Perg will present the topic “The Purpose of Management Audits in Process Management”. See more at: www.prozesse.at/ veranstaltungen/round-tables/28-mai
imprint Barbara Thoma ARGO Personalentwicklung GmbH Heiligenstädterstraße 31/ Stiege 1/ Top 602 1190 Wien tel +43-1-369 77 00 mail: email@example.com
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