by: Mark Donnolo
In my new book, Quotas! Design Thinking to Solve Your Biggest Sales Challenge, I describe a situation that will sound familiar to anyone who has ever initiated a change and then struggled to sustain it. A couple of years ago, I met with a sales leadership team from a company that provides accounting software to insurance agencies. Together we had developed a new quota solution that reflected the way software sales had changed over the past few years. Instead of a quota and compensation program that measured the number of licenses a rep sold, the new system measured the booked revenue and contract term the rep sold. The logic behind this move was easy to grasp: As the company moved toward a software-as-a-service (SaaS) model and more complex product offerings, some licenses had become worth more than others. So, rather than compensate the rep based on an up-front sale, the value and revenue from the license was spread over time.
A few months later I followed up to see how the new approach was working. They explained that while the basic concept had been easy to understand when it was first announced, the reps were accustomed to achieving a certain amount of quota attainment and compensation with each license. But with the new quota system, they first had to understand their booked revenue quota and then understand the booked revenue value of the licenses they sold relative to the quota. Since the company’s systems did that calculation and gave them the final answer, the reps were left in the dark as to how each sale affected their quota attainment goals and had a hard time doing their “back of the envelope” calculation after each sale. They didn’t know how to change their behaviors to maximize booked revenue rather than license sales. Everyone seemed to “get it” in the rollout meeting, but once the system was implemented, the reps in the field lost sight of their immediate goals. Confusion ensued; and ultimately, the company returned to the old process – at least for another year until they could get the new process right. I asked them how they had rolled out the new system. “We made an announcement and sent the process out to all of the managers with the dates for each milestone.”
That was it. One announcement. Then, when the rubber met the road, the reps and sales managers were left scratching their heads, baffled by the new system, which died on the vine.
In a case like that, sending just one message was shortsighted and insufficient. Change management requires a structured approach with frequent communication and reinforcement – especially when the change affects compensation. If only change were as easy for us as it was for Samantha Stevens in that television fantasy Bewitched. Samantha just wrinkled her nose and poof. On Bewitched, all the reps would have magically known how to calculate their comp under the new system. But here in the real world, understanding change can be a real challenge.
At SalesGlobe we work with clients on a number of fronts: from quota setting and sales strategy to talent development; from account planning and sales capacity improvement to compensation and business intelligence. The work we do varies. The nature, needs, and size of our client organizations vary too. Yet, virtually all of our engagements have one thing in common: The final step involves managing change.
Which makes sense. Sales organizations don’t call on us unless they’re looking to change something. The change could be merger and acquisition-related, or it could be that something about the company’s sales strategy isn’t working and they need some outside help. Whether it’s their method for establishing quotas, or their hiring practices, or the way they manage their sales enablement function, they know that something needs to change. The hardest thing about change is getting people to buy in and embrace it until it becomes second nature.
As fans of Bewitched will recall, Samantha’s husband Darrin was an ad man. For all his bumbling, he understood the value of a well-planned, sustained messaging campaign. We recommend a multi-pronged communication strategy to drive home change and to ensure buy-in from every stakeholder. The strategy includes communication delivered across multiple platforms, tailored to each audience.
Every organization and every rollout are different, but here is a useful framework for communicating change that will be most likely to stick:
The software company with the new quota method should have trained the reps in how their quotas and comp would be calculated. Then, after the rollout it should have reinforced messages about why the new method was beneficial to the reps. They might have sponsored lunch-and-learns or other sessions where the reps could come together in person or during conference calls to explain the change, walk through some examples, and respond to questions. Instead, the company did a lot of work to develop the approach then put it out there assuming the reps would not only understand it as well as leadership did, but that they would also internalize it and change their behaviors.
While we wish change management were as easy as a magic nose twitch, we know in our hearts that mortals like Darrin had the right idea. Change is hard, but not impossible. It requires creative thinking, planning, discipline, solid communication skills, and most important, a belief that the change is in the organization’s best interest and sending the right messages about it across a variety of platforms can make the difference between failure and success.
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