In our most recent article, Pandemic OCD – Are Sales Leaders Focusing on the Right Issue?, we described our frustration with advice sales leaders are being given by well-meaning thought leaders, and offered our perspective on getting back to sales management basics when recovering your sales team’s efforts. Having been through many downturns over our careers our goal is to add value about how to manage during a downturn. So, in the spirit of sharing experience and insight, we’re going to focus in this article on an issue that is not well understood by sales managers.
In going to market with our Funnelocity® application, we often receive feedback and questions about why having a Management tool for sales leaders is important. In truth, there is a huge difference between sales management and managing selling that is not widely understood, and this demands technology that is more exclusively focused on helping sales managers coach and train their teams. This has been a fundamental issue of sales management throughout our sales careers, and for most sales leaders it’s an Achilles Heel they don’t realize they have. Today, this issue can be the difference between success or failure in a difficult economy.
HBR in 1964 – Really?
To illustrate this point, a recent search on the topic of sales management on the Internet revealed an article from Harvard Business Review entitled, Sales Managers Must Manage.(1) To put it in perspective, this article was written in 1964! Credit HBR for understanding the legacy nature of this issue and for keeping this article out there. It’s as timely now as it was then.
The premise of the HBR article was that most managers sell when they should be managing. The article goes on to talk about the nuances of managing sales versus managing selling, but the key point is that managers are misinformed about what really constitutes management versus what is selling. Managing is defined as “planning, directing, and controlling the activities of other people in the same organization in order to achieve or exceed desired objectives.” This idea of obtaining the right results through others is something that managers fail to grasp or fully appreciate. It’s ironic that over 50 years ago this was recognized as an issue. So, the question is, what is it that managers are not managing?
Did We “Crack the Code?”
To gain a better understanding of this issue, let’s move forward a few years to 2012, when the book, Cracking the Sales Management Code: The Secrets to Measuring and Managing Sales Performance (2), by Jason Jordon, was published. This is a 250-page book entirely about sales management practices from an operational perspective: it focuses on why sales management and selling are two complementary but unique disciplines. Jordon argued that of all organizations in a business, only Sales has managed to “evade the rigor and discipline that has burgeoned in its peer groups.” He was contrasting the management framework and well-defined metrics of non-sales departments to sales, where even today sales organizations sometimes defy using a well-defined framework for sales improvement.
When CRM gained popularity as an automated means of managing sales information, sales leaders demanded pipeline reports, pushed to get CRM deployed and then worried later about defining how sales processes worked (if they ever did at all). Jordon describes this as “helping the client add structure to its automated chaos.”
Where is the Proof?
This is the legacy we still see today. Sales managers continue to focus on selling versus managing. While a great deal of progress has been made to increase sales productivity, improve CRM capabilities and enhance technology supporting sales teams, not much has been done to help managers improve how they manage.
Just to prove the point, it’s a documented fact that sales managers lose their jobs at an alarming pace. Notwithstanding the pandemic, the average lifespan of a sales manager is now around 18 months. We would argue that sales managers lose their jobs quickly because they fail to manage their people in the eyes of executive leadership. However, according to analyst studies, less than 60% of salespeople make quota, while nearly 90% of sales teams make their number.
So, you have to ask why a manager would be fired if 90% of the time they make their number. We believe the reason is that managers from other disciplines fail to appreciate sales management from a human capital perspective. When 20% of your team makes the Number and 80% come along for the ride, why do we need you to manage that? In our view, addressing the human capital side of management is the difference between managing selling and true sales management.
The Improvement Imperative
When you are a sales manager, there is a built-in imperative to improve. And that doesn’t mean just making the Number. Yes, hitting the revenue number is important, if not most important, but it’s not the only factor to consider in managing a team. Why don’t more of your sales team members make quota? Why aren’t your front-line managers doing a better job of actually coaching and managing team members? Where is your sales performance improvement plan?
What must be done to improve sales management? First and foremost, you must have an actual plan for how you are going to help every member of your team to improve. This human capital issue involves gaining insights and understanding as to why salespeople are performing at sub-optimal levels. It may be because of a faulty sales process or lack of certain activities. Or perhaps there are specific skills where salespeople need further training. We know today that there is a huge emphasis on sales messaging and having proper conversations with customers, but those constitute only two skills among many a manager might have to address with a salesperson.
The Three C’s of Sales Management
Two things need to happen to enable a sales performance improvement plan. First, goals for improvement must be set to measure improvement. Whether this is a function of more/better activities or skills improvement, these must be articulated, communicated and adopted by team members. Such plans and subsequent results must be seen, discussed, compared and collaborated on by managers and team members. You must extensively communicate this with your team members. We call Coaching, Communication and Collaboration the “Three C’s of Sales Management”.
Second, there must be a way to institutionalize and manage the information required to enable Coaching, Communication and Collaboration. This is why we built Funnelocity®, an application that is solely designed for the purpose of improving the quality of sales management practices. Funnelocity® embraces the practice of Funnel Metrics, a sales management methodology that embodies the vision of what sales managers must do to practice the three C’s. Funnelocity® is designed to capture the activities and behaviors of salespeople so that managers can assess, communicate and collaborate with their team members to coach them.
Funnelocity® automates goal setting by proposing goals based on past performance and quota-specific targets. The application uses artificial intelligence to identify statistically relevant metrics that are leading indicators of seller revenue performance. To address skills management, managers evaluate seller performance on key skills, and the application produces the right combination of activities and skills that help each salesperson identify a clear path to improved performance.
Funnelocity® not only provides the information to improve performance but establishes the best practices necessary to demonstrate to executive management that sales managers are working to increase revenue and improve every member of the sales team. This is key to sales management: every team member must make a critical contribution to the team’s success. The legacy of managers hyper-focusing on pipeline and allowing a few top performers to carry the team has outlived its usefulness, especially in light of increasing demands on front-line sales managers to cope with change in today’s selling environment.
Take the First Step
So, how do you get started down the path of moving from selling-based management to true sales management? First, recognize the cultural and historical norms that have held sway over sales managers literally since the days of “Glengarry Glen Ross”, going back to the 1950’s and 60’s. To effectively manage sales, you must learn to “manage”, HBR-style. Using a methodology like Funnel Metrics encourages managers to look beyond the pipeline and deal management to make numbers, to put the “management” in sales management.
Second, consider how technology plays a role to support the transition. What is more important, the next sales conversation, or creating a plan to make 100% of your team productive? After all, if performance is an imperative, it’s also critical to show management that you are enabling your human capital to fully reach their sales potential.
To give you an idea of the key tenets of the Funnel Metrics methodology, we’ve created a checklist you can review to evaluate how you stack up with your current sales management practices. Access it here.
To find out more about how Funnelocity® can help your team manage to its full potential and to discuss how to set up a Sales Performance Improvement Plan for your sales team, please go to our website, visit us on the Salesforce AppExchange, or contact us via email at [email protected].
(1) Loen, Raymond O. “Sales Managers Must Manage.” Harvard Business Review, May 1964, hbr.org/1964/05/sales-managers-must-manage.
(2) Jordan, Jason, and Michelle Vazzana. Cracking the Sales Management Code: The Secrets to Measuring and Managing Sales Performance. New York, Mcgraw-Hill, Cop, 2012.