No doubt you are familiar with philosopher George Santayana’s admonition: “Those who cannot remember the past are condemned to repeat it.” While that’s hard to dispute, most of us will admit to occasionally falling short. And when we do remember not to forget, we don’t always question history in a meaningful way. Instead, we make broad assumptions and we miss opportunities.
Our company, SalesGlobe, surveyed a range of businesses about their sales quota-setting challenges. One of the biggest, faced by 55% of respondents, is that their historical method doesn’t factor in Market Opportunity or Sales Capacity. In sales, if you remember only the past, you may also be doomed to repeat it.
Are there any organizations that can use a purely historical approach to quota setting? Sure. A company with no change in the size of its sales force and no improvements to its capabilities, such as technology to drive sales effectiveness or a sales ops team to provide support; no new competitors; and no variation in the customer base. For a sales organization that exists in such a vacuum, a purely historical method for quota setting makes sense. But the rest of us should remember that history is only one part of the picture.
In my new book, Quotas!, I show that without factoring Market Opportunity and Sales Capacity into the equation, history alone is as useful as looking into a crystal ball. In other words, if we don’t ask questions that get to the heart of the story, we still may be doomed to repeat the past.
In the book, I recount a personal anecdote that illustrates the trouble with history.
One night my daughter called from college. Her Jeep had suddenly seized up, stranding her on the side of the road. I contacted roadside service, which towed the vehicle to a nearby garage. After inspecting it, a mechanic informed me that the engine had frozen up because my daughter hadn’t put oil in it. Now we needed a new engine. The price tag: $5,000. Yikes! I wanted a second opinion. But it was the same at every shop: I explained the problem and they quoted me a steep price for a new engine.
Eventually, I called a shop with an unusual number of glowing reviews online. A guy named Jimmy answered the phone. “Tell me the story of the car,” he said.
Hmmm. Nobody had asked me that in my other calls.
“Tell me about the car. When did you buy it? How does your daughter drive it? Has she had any accidents? What kind of repairs have you had?” As I talked, I could hear Jimmy on the other end saying, “Hmmmmm. Oooooh. Right, right…”
“We got an oil change a month ago,” I said. “So, I know it wasn’t out of oil.”
“Tell me about that,” he said.
After about ten minutes, I’d told Jimmy pretty much everything. “Tell you what,” he said. “Bring it in and we’ll take a look.” I was already sold.
A day later, the phone rang. “Mark! Are you sittin’ down? You won’t believe this. We opened up the engine… and we found an old rag in the oil pan.”
Huh? Was this a set up?
We traced the story back to repairs we’d had at another shop. The problem wasn’t that my daughter hadn’t put oil in the car, but that when the other shop worked on the car they accidentally dropped a rag in the engine. That rag absorbed the oil and starved the engine, causing it to freeze.
After the other shop’s insurance company completed an investigation, we got a free engine.
If Jimmy hadn’t asked me to tell him the story, we wouldn’t have discovered the true issue – and I’d be out $5,000.
Jimmy the Mechanic wasn’t aware of it, but he used Sales Design ThinkingSM, a methodology that I describe in Quotas!. It begins by gaining a solid understanding of the problem. “Tell me the story of the car.” Jimmy wanted the whole story, which no one else had asked about. He empathized with my daughter and me. In fact, empathy is the first step of Design Thinking that leads to understanding the story and redefining the challenge. You look at the problem through the eyes of someone who’s facing it. In sales quota setting, that means getting bottom-up input, something that 52% of organizations told us they struggle with. Having gotten the complete story, Jimmy saw the problem and defined and solved for it better than the other mechanics.
Typically, when Sales Design Thinking is applied to quota setting, the process leads to questions that neither Finance, nor the C-suite, nor sales leadership ever thought to ask. As I describe in the book, using a Sales Design Thinking approach, you’ll examine your quota challenge differently, incorporating the three dimensions of quota setting—the People engaged in the process, the organization’s Market Opportunity, and the Sales Capacity of the organization. Combining the right problem-solving process with proven quota-setting methodologies can help you improve the quotas and performance of your organization.
Interested in learning more about Sales Design Thinking? Sign up for the SalesGlobe blog and preview Mark Donnolo’s new book, Quotas! Design Thinking to Solve Your Biggest Sales Challenge.