It’s About talent, Stupid
Can scientific sales assessment techniques drag companies out of the dark ages, asks Andrew Dugdale?
A paradox plagues modern business – perhaps the business paradox of the 21st Century.
How is it that with the greatest computing power in history at the disposal of business, with technological marvels that fuel the engine of production far beyond the dreams of the great tycoons of the past, many firms still employ 19th century techniques at one of the most critical nodes of their business?
The paradox baffles us, and the paradox is this….
At the point of entry and development of its front-line sales force – the key personnel responsible for generating revenue, the very life-blood of the company – even the largest and most sophisticated corporations on the face of the planet may still be found using methods developed haphazardly more than 100 years ago: the unstructured interview, with its hit-or-miss questioning, or even worse, good old intuition. The fact is that so-called role model, ‘world-class’ corporations often have no structured way of measuring the capabilities of their sales force.
Current business conditions
In today’s straitened economic times, with cut-throat competition on a truly global scale, can any organization, large or small, afford to be using anything less than the very best modern hi-tech instruments to measure, assess and select their most critical assets?
In a chaotic business world of shrinking margins, declining market share, and flagging global demand, failure to apply the most up-to-date tools could be the last mistake a company makes. No-one is immune to these pressures: we have just witnessed the demise of many of the great financial institutions everyone assumed to be the pillars of our global economy and the backbone of our recovery – now nationalized on an unprecedented global scale.
Why are so many firms ensnared in this paradox?
It may be part past habit and part ignorance of the existence of reliable instruments.
Track record
Now, firms frequently hire sales people based on their previous track record, and this might seem quite logical – yet who today would buy shares based only on their historic record of strong growth? Without lead indicators of how they will perform tomorrow? Next month? Next year? The risk is just too high.
When global market demand is declining as it is today, selling requires finely honed skills. Optimizing the capabilities of a company’s sales team can literally make the difference between success and growth or business failure. And while many companies pride themselves on innovation and creativity, they remain stuck in the last century with regard to sales assessment.
Primitive methods
The fact is that too many firms have, at best, a primitive method to measure the skills and actual capabilities of their sales team. Even fewer firms can compare these capabilities against ‘fit to role’ and ‘likely future performance’. Sales people are also frequently put into roles based on the need to fill an available vacancy – rather than because they have been carefully assessed for their actual fit to, and motivation to perform, the required role.
Sales people are also often developed based on the flavor-du jour training, sheep-dipped, whether they need it or not. Or, they find themselves trained on whatever seemed right at the time of their personal development review – usually an informal and often an unstructured affair.
There are good historic reasons why this potentially self-defeating process occurs, but even better reasons to replace it with a 21st century solution. Look for a moment at three ‘success measures’ by which an individual’s performance or potential performance can be measured….
1 Historic performance – the ‘lag’ indicators
This is the most commonly used measure, but it is the most unreliable predictor of future performance. Why? Because success from this method could easily have been achieved by ‘right place, right time’ or ‘luck of the draw’ or other chance circumstances that have nothing to do with the candidate’s competence and skill. We all know people who receive undeserved success and, on this metric, it is hard to separate out those who are genuinely gifted from those who have been just plain lucky. With this method, you roll the dice.
2 Current competencies – the ‘now’ indicators
This is a snapshot of a person’s competencies at any given moment in time. With this information, we identify the skill map of ‘top performers’; and these skill maps then serve as a benchmark against which to hire new sales people, or as a goal for the development of other sales people in the company. So what’s wrong with that?
- First, ‘top performers’ may not actually be at the top of their own game, when compared with a wider group of their peers in the same role;
- Secondly, hiring and developing against capabilities that historically delivered good results does not deliver certainty about the future – there is no guarantee that those same capabilities are the ones that will be required in today’s ever-changing markets to deliver good results; and
- Thirdly, it is not possible to be clear whether other sales people will be motivated to deliver on those enhanced skills, even if they are trained to the same level as the ‘top performers’.
3 Future performance – the ‘lead’ indicators
Clearly, everyone wants to know this one thing about a sales person – will they perform in the future? This has traditionally been the unattainable Holy Grail because no ‘off the shelf’ benchmark for future good has existed, role-by-role, for sales people – although this is changing.
McKinsey & Co said in the Q1 2008 edition of the McKinsey Quarterly: ‘Companies like to promote the idea that employees are their biggest source of competitive advantage. Yet the astonishing reality is that most of them are as unprepared for the challenge of finding, motivating and retaining capable workers as they were a decade ago’.
People’s heads
Perhaps it has taken a major financial and economic upheaval to break the old mould . . . or maybe it’s the recognition that after all processes have been optimized, often at huge cost, what remains is optimization of the people. Finally, this realization is hitting the boardroom table. Here’s McKinsey again: ‘When companies do make talent a priority, they often fall into a trap: focusing narrowly on HR (human resources) systems and processes, which divert attention from the place where most of the obstacles lie: people’s heads.’
The root of the issue lies here: ‘Because to date the ability to measure the impact of human capital on the bottom line has been limited to anecdotal evidence at best – of little relevance to investors and hence – little real main board attention has been paid to the talent challenge.’
For too long, the crucial metrics have been missing, but that’s changing right now.
New wave of assessment
A new wave of sales assessment companies are providing the missing metrics and the means to measure the factors that drive those metrics, so now at last, maybe there actually is an option to focus the main board’s attention on the human factor. By starting with the core of all business prosperity – the sales force – business can start to grow again, powering the world out of recession and back to prosperity.
Maybe – just maybe – there is an answer emerging to one of the greatest business paradoxes of our time – how companies in the 21st century can finally throw off the last remaining shackles of 19th century business and achieve their full potential. Finally, the time has come to assess the true revenue potential of each individual member of your sales team, developing just the skills that drive success, motivating them in a way that drives increased commitment and loyalty and, ensuring that their intellectual capacity is applied to maximum effect in the most appropriate role.
