SPM and C-Level Goals

When thinking about sales strategy and sales compensation, it’s critical to have a framework. The compensation plan should always be the caboose, not the engine. Compensation should never drive the strategy -- the strategy drives the compensation.

 

We recently worked with a multibillion dollar company to help design their sales compensation program. Rather than starting with the plan, we started with the business strategy. We met with the CEO of the company, the president, and all the heads of sales, and asked them about the priorities for their business.

 

Here’s what they said:

  • Gain greater productivity from existing resources: “We want to drive twice as much sales productivity three years from now.”
  • Drive a sales-oriented culture: “We need to break the complacency in our sales culture.”
  • Promote cross-selling of our portfolio: “We want to execute our strategy of offering our full portfolio of solutions based on customer needs.”
  • Structure for solution selling: “We need to build the sales organization of our future with one face to the customer.”
  • Align to high-value segments: “We want to align our best sales resources with the right buyers further up in the organization.”

 

To make the connection between these business priorities and compensation, the company’s leadership focused on their priorities for the design of the compensation program. They knew what they needed to accomplish. Once they got down deep into the compensation work and the team started getting uncomfortable, making comments like, “Do we really want to do that?” and “I’m not comfortable with this measure,” and “Finance is not going to support that upside,” it was easy to say, “Look, here’s what you want to accomplish as a business. We’re going to have a hard time going back to the CEO saying we missed a couple important points.”

 

Nobody wanted to return to the CEO with anything that didn’t support his goals for the business. The C-level to front line connection was made.

 

As sales executives determine priorities for their business related to sales compensation, they need to set their C-level goals. These will define the major priorities for the organization that will be converted to the sales compensation plan. Those priorities provide clarity for how they will design the plan and the behaviors the plan’s going to drive in the organization. Once set, the C-level goals will force answers to the key questions that will lead to the program’s success. They will also help overcome resistance as sales leaders become deeply involved in the design of the compensation plan.

I’m heading to the IBM World of Watson 2016 conference later this month to be a part of their Sales Performance Management discussions. IBM has combined their sales performance management solutions and built in the cognitive capabilities of Watson Analytics. They’re using the power of data to strengthen the connection between sales strategy and sales performance, leading us into a new era of cognitive business.

 

If you’re planning to be at the conference, I’d love to connect. Stop by the IBM Incentive Compensation Management booth. I can also be found in the IBM mobile app. Or as always, you can reach me at mark.donnolo@salesglobe.com.