Leadership | A Sales Guy

Bad Forecasts Aren’t a Mistake

The New York Times had a great op-ed piece today about companies missing forecasts. The premise – CFO’s and CEO’s are over confident in their beliefs.

I completely agree with this and think the premise can be extended even further to sales people. You can usually see this “hubris” in sales when sales people are well connected with the customer. The customer gives them their forecast, their expected sales for the next year and the sales person takes it to heart.

They believe their relationship with the customer and their knowledge of their “business” is spot on. This confidence drives faulty forecasts.

The New York Times does a good job explaining this, there is nothing I can add. That being said, I think there is another reason for faulty forecasts — forecasts have never been expected to be accurate.

Forecasting HAS never been an exercise in accuracy. Forecasting has always been an exercise in articulating how much growth is going to be had not an authentic expression of what is really going to happen.

Nobody wants to hear your going to lose money. No one wants to hear business is declining. No one wants to hear that the numbers are falling. Therefore, no one is allowed to forecast the truth. REALITY is something forecasts omit 90% of the time. Sales and corporate forecasts are marketing tools designed to build confidence in the company, the division or the sales person. They are rarely a fair representation of reality.

Know one wants to hear the truth — unless it is good.

An unprecedented number of companies missed 2009 earnings. Why? In my opinion none of them forecasted a decline in business from 2008 to 2009, despite all the economic signs and information suggesting 2009 would be brutal. There was more than enough information in the fall of 2008 that suggested for most companies growth was an impossibility and a decline was most probable.

Rather than embracing the data and building a forecast and plan to minimize the decline, most companies moved forward with completely unrealistic growth forecasts.

This intolerance of negative forecasts permeates all the way to sales. Sales forecasting is rooted in the expectations of growth, not accurate forecasting.

If sales teams want to improve productivity, improve forecasting accuracy and minimize surprises, the culture of forecasting needs to change. It needs to move from telling people what they want to hear to telling people what is actually happening.

If your company or sales team has never forecasted negative sales numbers yet has had a decline in revenue, that’s the first sign your company doesn’t forecast but promotes. If you have sales people or executives who have put forth compelling data based arguments for a decline in revenue or sales and they were marginalized or removed, it’s another sign you don’t forecast, you promote.

Real forecasting uses data, the good and the bad, to determine the most accurate prediction of future revenue. It’s that simple.

If some forecasts are deemed OK and others aren’t, reality is quickly being flushed from the process. When that happens just ask the powers that be, what number they want to see and give it them.

It will save everyone a lot of time, time your going to need to figure out how you can make that completely unrealistic forecast.

There is no such thing as a good forecast or a bad forecast . . . just an accurate forecast.

The Sales Forecast, An “Informed Guess” (customerthink.com)
Sales Forecast Accuracy – The Results Are In (and it’s not pretty) (customerthink.com)
How Important is it to Have Accurate Sales Forecasts? (strategic-business-planning.suite101.com)

August 22, 2010 | Filed under: Business Performance,Sales Process | View Comments |

It Happens with Chemistry

Sales teams have an energy or chemistry. Like a sports team that is on an amazing run or the one with all the talent that keeps loosing, sales teams win or lose based on chemistry.

Talent, structure, leadership, attitude, environment all come together to create the sales team chemistry. Sales teams with great chemistry win, those with terrible chemistry lose.

Sales is both an individual “sport” and a team “sport.” Sales people feed off of one another. They talk, they borrow each others ideas, they move together like a school of fish. When the chemistry is bad, the team won’t perform, despite the talent or product.

When the sales team isn’t sharing information, when they are fighting with product and engineering, when they aren’t connected with marketing, when they are creating silos and an “us, them” environment the chemistry is NOT good.

Sales team chemistry is a leadership problem. The old school sales culture often times contributes to poor chemistry.

Sales teams that crush it, have great chemistry, there is a confidence in the company, the products, and leadership. A trust exists. Creativity rules the day, difficult problems are overcome, customers are happy, and revenue is growing.

If a sales team isn’t making its numbers look at chemistry. If a sales team IS making it’s numbers look at chemistry. Like sports teams, winning in sales flows through chemistry.

What is the chemistry of your sales team?

August 16, 2010 | Filed under: Sales Leadership | View Comments |

4 Keys to Proactive Sales Management

I see this far too often. Sales managers and sales leaders reactively manage their people. They reactively manage because they to manage to results. Results are a trailing indicator in sales. If you manage to results your too late.

It’s a common approach in sales. The sales rep misses quota. The manager says that’s not good, don’t miss quota again. The rep misses quota again, the manager puts him on a PIP (performance improvement plan), which in essence lays out goals the rep must meet in the next 30 to 60 days or be fired. In the less agressive scenerios like this, the manager works with the rep to figure out what is wrong but even then it’s still being reactive.

I have always felt this is a bad way to manage and lead sales teams, yet it has staying power and seems to be the course of action for most organziations.

Being reactive does little for anyone. The key is to be proactive. Like most things in life getting ahead of the problems or preventing them entirely is far better than trying to fix them. The key is find the leading indicators of failure.

To find the leading indicators I break down sales management into 4 integrated categories; planning, execution, results and talent.

Failure and poor performance can and will be seen early in any and all of these categories. They are a barometer for failure or success.

If a poor plan is put in place, failure is imminent even if it’s executed well by a talented sales person. – Manage the plan.

If a great plan is in place but is executed poorly by a talented person, failure is just around the corner. – Manage execution.

If the sales person lacks the skill or talent a good plan won’t make a difference. – Manage talent

If it’s a poor plan, executed poorly by someone with out the talent you’re screwed. – Manage all three.

If it’s a great plan, executed brilliantly, by a talented sales rep and the results aren’t there, you’ve messed up somewhere. – See 1, 2, or 3. The problem is there.

Proactive management requires a process that embraces and monitors all the critical elements to sales delivery.

My management process works like this;

1) Everyone on my team builds a yearly plan. They share it with the entire team, peers and all. We cut it up, attack it, challenge it, and rework it until its a solid plan. Plans go through a rigorous evaluation process to ensure they’re sound.

2) I focus on execution. Plans are reviewed every quarter asking the following questions: what did you say you would do, what did you do, what did you learn, what are you going to do next quarter. The process ensures proper execution by evaluating WHAT a rep is doing and HOW they are executing to the plan. This allows problems to be identified early and changes made on the front end.

3) I hire for talent, and coach. The most important aspect of proactive management is talent. I hire for talent and I coach them. I have standing one on one meetings every 6 weeks with all of my direct reports. During these sessions we talk about what they do well, what they need to improve on and what they need to stop doing. These are not performance reviews. They are coaching sessions, designed to help them grow as a sales person and as a leader.

A process that embraces all of these elements is proactive. Problems are seen early and symptoms are separated from root cause.

Getting poor results with proactive management is almost impossible. You see it coming long before the boat sinks. It gives you time to course correct, limit the damage or turn things around.

If your results aren’t there, if the numbers are off, if quota is in jeopardy it’s one of 3 things; a bad plan, poor execution or lack of talent. Quick can you tell me which it is? How do you know?

Guest Post: Why Are 50% of Sales Reps Missing Their Sales Quota? (thecustomercollective.com)
Hoover’s Webinar to Reveal Top Tips for Hiring and Managing Sales Teams – “Prospecting and Territory Development Best Practices” (eon.businesswire.com)
CEO Guide to Sales Management – Introduction (frontofficebox.com)

August 10, 2010 | Filed under: Business Performance,Career Development,Hiring/Firing,Leadership,Personal Development | View Comments |

Leadership Development Isnt A Budget Item

Leadership development isn’t a budget item or a checklist, it’s a culture.

Wally Bock had a great post about this Wall Street Journal Article; Leadership Training Gains Urgency Amid Stronger Economy In it Wally compares creating urgency for developing leaders to someone planting tomato seeds at 4:00 in order to have tomatoes for dinner at 6:00. It just ain’t going to happen.

Leadership development takes time. You can’t just make it happen.

I have held “leadership” positions with at least 5 different companies. Not once during the interview did someone ask me what my leadership style was. Never was I grilled on how I develop people. Never once did anyone inquire about my leadership tools. None of the companies shared with me their definition of leadership and the required leadership skills they expect in their leaders. In only a few cases was their any discussion of leadership at all. I believe this is prevalent because most companies treat leadership development like a checkbox.

Most of my interviews have instead centered around my industry expertise, my knowledge of the products, the customers, and my contacts.

Most companies look at leadership development as a check box or budget item. They budget for leadership training, throw it over to HR and send folks to random training courses and declare their commitment to leadership.

Unfortunately it doesn’t work this way.

Leadership development isn’t a budget line item or training courses but a culture.

Companies with a leadership culture do the following:

1) Define leadership for the entire company
2) Have stated leadership behaviors and expectations
3) Create leadership identification programs based on their definition of leadership and their expected leadership behaviors
4) Hire and promote based on leadership first and knowledge (product, industry, company, customer) second.
5) Evaluate all managers on their succession plans and track record for developing leaders.
6) Continually create new leadership tools and methodologies
7) Have flexible environments allowing budding leaders to easily move throughout the organization, preventing pigeonholing and dead end positions.
8 ) Have reward and recognition programs celebrating the right leadership behaviors.
9) Provide on going leadership training an development
10) Have mentor programs

Most of things on this list don’t cost a dime. They are absolutely free. Yet, few companies embrace them.

Because a strong leadership culture costs very little it’s recession proof. Yes the training costs money, but it doesn’t cost anything to provide mentors. It doesn’t cost anything to have a leadership identification program. Real leadership programs, the ones that don’t focus on the training checkbox, don’t have to worry about hard times on the horizon. They’re ready, with the leadership poised to tackle the challenge.

Take leadership development out of the list category and put it into the culture category. Define it, hire for it, fire for it, reward for it, promote for it, and get out of the way.

You can’t create a leaders overnight.

Authentic Leadership Development~ Part I (psipsychologytutor.org)
Great Leadership: Leadership Development: Executive Self-Assessment (linusfernandes.com)
Five Steps to Addressing the Leadership Talent Shortage (blogs.hbr.org)

August 5, 2010 | Filed under: Leadership | View Comments |

Coaching Matters

Last week I posted my thoughts on people who are coachable. My take, it’s the most important trait you can hire for. You can see the post here.

One of the most interesting things about the post was a comment left by David Brock CEO and Founder of Partners in Excellence, a sales consulting firm. David made the point that just as important to finding good coachable people, was making sure those people had coaches.

. . . Great managers need to both coach and be coachable.

We do face a real challenge, hiring people that are coachable is great, but they need to get the right coaching. Too few managers invest the time in coaching or coach effectively.

While the data is a few years old, we did a survey of several 100 sales managers a few year ago. One question was, “How frequently do you coach each sales person?” The response astounded us, 68% coached their sales people once a quarter or less.

Managers don’t understand coaching and don’t integrate coaching into the fabric of the business. To drive high performance, it’s critical to have coachable people, but it’s as critical to coach them!

David makes a great point. To hire coachable people and then not coach them is not only inefficient, but foolish. We need to coach the coachable.

My management style is to coach. Some people like it and others can’t stand it. To me a coaches job is to bring people along. It is to get as much out of them as possible. Coaching is about providing people the support, feedback, and honesty that will allow them to grow and be the best they can possible be. Not everyone likes to be coached as they don’t like to be told they aren’t good at something, or that they need to improve. A lot of people don’t like the openness and exposure that comes with coaching.

It’s because of this, coaching is hard. Coaching takes an investment in people, management doesn’t. Management isn’t an investment in people, it’s an investment in process, goals, and delivery. People are just another resource to be managed. This can work in the short-term, but not in the long-term.

Coaching is an investment people. To be a coach takes time, commitment and understanding. Coaching requires an understanding of the person as a person, what their motives are, their career aspirations, their strengths and weaknesses, their capabilities, their learning style, their personality, and more. Coaching embraces the individual not the resource.

I like this part of leadership. I get motivated and inspired by watching others reach their goals, grow as individuals and achieve greatness. Because of this, I coach.

I invest in the people that work for me. I challenge them to set higher goals. I look to understand who they are and how they tick. I want to know why they do what they do everyday, how they do it, what they want to do next, what causes them anxiety, what is a breeze, what they use as a crutch and what they avoid. It all helps me to be a better coach. I look to coach my people every chance I get. Like David said, it’s not a quarterly effort, but should be an ongoing process. Coaching happens throughout the days, weeks, and months. Coaching is situationally driven. Coaching is about capitalizing on situations. Coaching requires being on the lookout to provide opportunities for growth or improvement. Good coaches provide support when the opportunities appear, not at some regularly scheduled time.

I like what David said. He’s right. Hiring coachable people is only half of the effort. Coaching them is the other half. Hire coaches and hire coachable people and then coach them. It makes all the difference in the world.

What is Effective Coaching? (socyberty.com)

July 13, 2010 | Filed under: Career Development,Leadership,Personal Development | View Comments |

Results Needed, Immediately

Immediate results don’t happen. If they do, they are rarely meaningful. It takes time to create meaningful results. Yet, in times of crisis the cry for immediate results comes fast and furious. The push happens. The threats rise. The rallying cry is sounded. By carrot or stick the expectation of immediate results is created.

The problem is, results aren’t immediate. Results are the sum of effort, decisions, failure, commitment, focus, drive, partnerships, discussions, analysis, and most important time.

Looking for immediate results will get you results, but meaningful results, that’s a different story.

July 7, 2010 | Filed under: Business Performance,Leadership | View Comments |

I’d Fire a CEO Who Over Saw a Sh*tty Culture

Yesterday’s post got me thinking a bit more about culture. So, I figured I’d do another post on it.

Culture comes from the top. I’ve been in companies with phenomenal cultures where I bled the company red and I’ve worked at companies where the culture made me want to vomit.

I’ve been personally successful in developing cultures. I’ve built a few cultures where we were the envy of the organization. To this day we still talk about “the good old days at . . . ” I’ve also made some mistakes and failed at building cultures.

I am passionate about culture and understand what it takes to build them.

It’s simple: LEADERSHIP

Culture starts at the top. I’ve worked with leaders who felt creating and managing a culture was not their job, but the employees. Needless to say none of these leaders are still in their positions — and they shouldn’t be.

If companies with strong cultures outperform companies with shitty cultures then it seems to reason a good culture is key.

It starts with the CEO. He or she owns the development and reinforcement of the culture. If they don’t have the leadership to implement and create a winning culture, they are not fit for the job. Unfortunately, few board of directors hire, fire, have metrics, or implement processes to measure a CEO on their ability to create a winning culture.

I am aware of only one instance where culture was a key metric measured by the board; where the CEO was held accountable for the environment he created for customers and the employees.

In a business world that increasingly looks like the professional sports, with winners and losers changing places every day, culture is increasingly becoming a critical element to winning.

Apple and Google are great examples of where culture is at the heart of success.

A CEO, like a coach, is responsible for creating a winning environment. For me it’s not enough to deliver the numbers by themselves. Numbers with a shitty culture are a house of cards. As soon things get difficult or the river changes direction, the company will be unable to respond.

A CEO’s job is to drive growth and improve shareholder value. I submit this can not be done over the long haul with a shitty culture.

Culture is too important to the success of companies. Companies with good cultures make better products, have happier employees, and create better shareholder value.
I think more boards should add a culture component to their key metrics. I think they should add “culture development and execution” as part of the hiring process. I think they should create metrics to measure culture. I think they should hold the CEO and the executive team accountable for the culture and in the end if a CEO can’t oversee a good culture. The board should fire them . . . I would.

How Organisational Culture Affects Employees (workplaceculture.suite101.com)
Zappos: the poster child for why start-up VCs suck (inquisitr.com)

June 8, 2010 | Filed under: Business Performance | View Comments |

Think Like You Have To Defend It

I was talking to a former employee the other day. We were talking about the changing work place and the unique dynamics the down economy has created.

During the conversation he said he was getting frustrated with his new manager. He said he liked him but didn’t feel he was bringing much value. He said he asked a lot of questions, but not Jim Keenan questions. Flattered, I had to ask, what are Jim Keenan questions.

He said Jim Keenan questions challenge you to dig deep and then defend your thoughts. The questions his new manager would ask were questions he himself would ask, they weren’t questions he hadn’t thought of. They were how do we fix this problem questions, NOT what is the problem, why is it a problem, how did it become a problem, is it really a problem, is it THE problem, does it really need to be fixed and then, if so, what needs to be fixed first and why?

He said the questions didn’t help get to the heart of the matter. They just accepted what was on the table. They didn’t challenge his thinking.

What my former employee was saying, was he enjoyed being challenged. He wanted a manager to help him see more than he was seeing at the moment. He said he liked it when we worked together. We never just accepted things for what they were. We didn’t allow what was on the surface to dictate our thinking and because of this he was far more effective.

I’ve always held that being a coach is a leaders job. To be a coach means pushing your players. It’s challenging their capabilities and perspectives. It’s getting more out of them than they can get out of themselves. The best way to do this is to ask questions that challenge their thinking. It’s making them uncomfortable.

The best leaders I’ve ever had were the ones who challenged my thinking. They made me own my thoughts. It was never good enough to say what I thought. I had to defend it.

Forcing people to defend their thoughts doesn’t allow them to just grab what sounds right or quickly fits for the moment. Defending our thoughts makes us think long and hard about why we are taking a position. It compels us to do more research, gather more data, test our assumptions, and be more clear.

Challenging people to defend their thoughts doesn’t make you popular, but it definitely separates the wheat from the chaffe.

This former employee is proof of that, he would make some of the best bread you’ve ever tasted.

If you’re going to bother thinking, think like you have to defend it.

April 29, 2010 | Filed under: Career Development,Leadership,Personal Development | View Comments |

Rules

Rules are good when they make the game better. But, if they change the game they’ve gone too far.

Too often we focus on making rules and lose site of the game.

Companies do this. They start making rules. The rules begin to change the game. Overtime, everyone starts focusing on the rules, and forget what the game was.

If your losing customers, if the competitors are gaining, if the status quo is constantly defended, if innovation is stifled, then the rules have changed the game.

Don’t let the rules change the game.

Be the person that MAKES the rules make the game BETTER!

April 25, 2010 | Filed under: Business Performance,Leadership | View Comments |

The Hardest Part of Business; Getting Real

The hardest part of business is getting real. Getting real is being honest, truthful, and accurate about what is going on in your company, with your employees, the market, and your products. It’s confronting the reality of your business. It’s seeing your business for what it really is, not as you’d like it to be.

Getting real is difficult. It is unpopular, painful, political, and uncomfortable. It takes courage, humility and a willingness to be critical.

If we can’t get real with what’s going on, execution becomes impossible. Growing the business, defeating the competition, improving margins, being innovative, surviving a recession requires we confront reality.

Getting real is hard. We don’t like to think we hired the wrong people, or built the wrong product. It’s hard to accept a new competitor is building a better product and taking our customers. It’s frustrating to know our supply chain is anything but “real-time”. It is painful to know we’ve made poor decisions; decisions that haven’t been the best for the company. But, we have to. Success depends on it.

Most of us become defensive when asked to face reality. We deflect, defend, and argue. Rarely is ownership taken. No one wants to be THAT guy or work for that company. The reality is, we are ALL that guy and we ALL work for that company. That’s the first reality to accept. Everything/everyone isn’t going right today and everything/everyone won’t be right tomorrow. Accept it, take ownership, be honest, make the right change and move on.

The only thing worse than not accepting reality are the results from not doing so. By not getting real, we don’t make enemies in the office, and we remain in our comfort zones. When we don’t confront reality, we don’t have to call our baby ugly and that feels good.

Just because we don’t call our baby ugly doesn’t mean it’s not. Don’t deny and defend, get real and confront reality. The rest becomes easier.