Three Words That Should Always Be Connected In Your SALES PROCESS
GOALS - ACOUNTABILITY - COMPENSATION
In two of my previous blogs I have referenced using Goals and Objectives to improve your forecasting and help your New Sales Managers get off to the right start. So now it is time to actually address the topic of routine Goals and Objectives. It is unfortunate in our profession that many leaders will agree on the importance of good goals and objectives, develop them and then fail to use them effectively in managing their teams. This discussion will be primarily focused on the WHY Goals and Objectives are important more so than HOW you develop them, which is much more business specific.
First let’s all get on the same page with a common understanding of Goals and Objectives. Many of us, and I have been guilty of this as well, tend to lump Goals and Objectives (Gs & Os) into the same bucket, mostly out of “leadership convenience”. Hey, we are all busy people! Think strategically for a minute. A goal can be described as a strategic milestone necessary to achieve your overall business strategy. Objectives are the tactical actions that you will employ to reach that milestone. For example, your goal is exceeding your revenue target (quota). Your objectives are the measurable tactics and activities that will get you there. So, there are three basic points to remember:
· A goal describes a broad destination, simply defining your target.
· Objectives are specific, measurable activities necessary to achieve your goal.
· Your Strategy “connects the dots”, linking your objectives to your goals.
Therefore, resist the temptation to use these terms interchangeably. Your goal is your destination and the objectives are your path to get there. Keep them separate and clearly defined as part of your overall strategy. This helps your team understand their importance.
Now, let’s move to WHY goals and objectives are important…which is why we are here. The importance of using Goals and Objectives to manage your sales teams, or any teams for that matter, can be summed up in seven key points.
1. Aligning your strategy with the rest of your organization. Everybody must be “rowing in the same direction”! The objectives of your salespeople must be a subset of the objectives of their managers, and theirs must be a subset of yours. A common example of this problem would be your sales team compensated on “orders” (top line revenue) and your marketing team compensated on margin targets. I am sure you have likely heard the marketing department referred to as the sales prevention team. This is why, the sales team wants the order at all cost and willing to discount heavily to get it, but the marketing team on the other hand, wants to hold their specific margin targets and won’t support the discount. Now you have a conflict…rowing in different directions!
2. Driving the behavior needed to achieve your strategy. Goals are achieved by accomplishing Objectives, which drive specific activities. Those activities should be designed to drive the behavior needed to be successful. If the obvious goal is achieving quota (a given) then the measurable objectives would be things like selling full product line, hitting forecast, maintaining margin targets, maintaining customer base, identifying new business, achieving call activity etc. This is the best way to insure that what’s important to you , is important to your team. QUICK NOTE: Routine Goals and Objectives should be quarterly to properly motivate your team, as well as give you time for corrective action in the event you are not tracking to hit your yearly objectives.
3. Gain agreement and establish accountability to your strategy
Goals and Objectives will only be effective if you establish complete accountability to them. You must communicate that this is how you manage, and by agreeing to their specific Goals and Objectives, your team is also agreeing to the process.
4. Provide a benchmark for expectations By agreeing to the process above, they are also agreeing to the expectations by which they will be measured. Everyone is measured consistently by the same standards, no more exceptions or excuses. Within in reason of course; you never say never.
5. Provide a basis for reward…compensation plans For those of you that are in to “SMART” goals then it’s time to make them SMART-R! The “R” stands for Reward. Without any doubt, the best way to make Goals and Objectives more effective is to tie them to compensation. This also simplifies developing and discussing compensation plans. Salespeople will almost always do what you pay them to do! This methodology makes success and failure very easy to understand.
6. Make your business much easier to manage As I said previously, as Sales Leaders we are very busy people with a lot on our plates. Arguably, the most important thing we have to do every day is manage our sales team and make them better. If every member of your team has clearly communicated Goals and Objectives, understands the expectations, accepts the accountability and know how they make money, your team will be infinitely easier to manage. Plus, you will develop new leaders in the process.
7. Dealing with under-performance
I can’t leave this discussion without a brief explanation of how routine Goals and Objectives will help you deal with under-performance. If this process is executed correctly, everyone knows what’s expected and how they will be measured. In the case of poor performance, it is very easy to transitions someone’s Goals and Objectives to a performance improvement plan (PIP) to help them improve or terminate them, depending on the circumstances. There are no questions about motive, fairness, documentation or threats of legal actions. Everyone is measured the same way and understood the rules of the game with the documentation to prove it. An added benefit to this is that if the PIP is written and handled correctly the poor performer will recognize that this is not a good fit for him or her and will resign long before they have to be terminated. A good leader will help them make the transition out on their terms to protect their resumes, as well as the company.
Getting back to a positive note, the primary reason for writing these blogs is to translate 25 years of experience and a bunch of battle scars into things that will help make your business easier to manage and improve your effectiveness as a Sales Leader. There are very few things that will do this more than establishing routine Goals and Objectives. However, developing them is only half the battle; you must learn to use them!