How to Make Tough Sales Structure Decisions?
By Mark Allen Roberts
Many business owners and CEO’s are trying to determine the best strategic adjustments they need to make now and post Covid-19. Some leaders talk about surviving right now, keeping their head above water, not needing to close locations and so on. Many share it is difficult to develop a plan with so much uncertainty and chaos.
A select few leaders however are focused on not just surviving but thriving after Covid-19. For those of you who wish to use this current time to retool and reorganize your sales team to meet buyer needs today and in the future, Harvard Business Review published an excellent article: Right Personnel Decisions Now to Thrive After the Crisis.
In this post I will share some of the insights from the article and discuss how to position your business now to thrive after Covid-19.
The article starts, and rightfully so, reminding us cash is king in such challenging and turbulent times. Leaders must review the data they have today, conduct scenario simulations and make strategic decisions to improve your cash position. This topic of improving your cash position is a topic I am confident many thought leaders are writing about and I will not discuss this in this post.
Why this timely article captured my attention is the author does an excellent job of sharing how to make strategic decisions about your people.
The author shares there are basically 4 categories of people decisions
Repurposing
Identify what parts of your business are slow or have stopped completely and how can you repurpose the people that support those areas to new areas to add value today.
For example most sales teams have salespeople who are outside salespeople. Their typical week involves traveling and meeting with their customers and helping them solve problems. In many states these salespeople are being repurposed to inside virtual sales roles. The difficulty some teams are experiencing is we have found only 41% of salespeople today have the skills, discipline and mindset to work remotely.
If you find yourself having outside salespeople working virtually you may wish to assess their virtual selling skills and provide training for any skills gaps you discover.
My prediction is many sales teams will reorganize to leverage the productivity of an inside sales model once we emerge from Covid-19. Many the CFO’s I speak with are sharing they are seeing a drop in top line sales but an even more significant drop in sales expense. They will be challenging sales leaders to ensure the sales organization of the future maximizes the return on sales expense and explore more virtual sales in the future.
Engagement
Prior to Covid -19 many teams had concerns with employee engagement. Some studies shared as much as 65% of employees are not engaged and doing just enough to get by. This was costing organizations billions before Covid-19.
The author shares a key part of getting through a crisis is bringing your top performing team members with you and keeping them engaged.
Has your organization done an employee engagement research study?
What % of your team was not engaged?
What % of your team is not engaged today?
When it comes to salespeople we look for their engagement in their Sales DNA. This part of the assessment helps us discover their sales beliefs and motivations. On some teams I have worked with as high as 30% of the current team lack the will to sell. In other words they joined the sales team but lack the commitment, motivation and often sales skills to drive revenue growth. We need to consider engagement as we reorganize and retool our sales organizations for the future.
Learning, Retooling, Up skilling
As teams prepare to become more buyer centric they will often need additional training and up skilling for new roles. Many teams are currently assessing if they have the right salespeople in the right roles and if not what changes will need to be made.
As teams strategically use assessments, performance reviews and transaction data to identify the right person for the right roles, there will be a need for training.
One of the biggest pushback’s I have received from salespeople about training is: I don’t have the time. When we look at how salespeople spend their time, the average outside salesperson spending 15% of there sellable time traveling, and since they are not traveling now…they have the time. Let’s use this time wisely and prepare our salespeople with individualized learning plans that equip them to be successful in their current and or new roles.
The author reinforces the need to identify skills gaps now and use this time to close these gaps now.
Right Sizing
The hardest part of adjusting your organization to a shift of this magnitude is letting people go. Downsizing, furloughing, laying people off, eliminating their positions…whatever you call it is tough and very emotional. It is a leaders job to make the tough calls based on the best information they have today and very emotionally draining.
However as a leader its something we must do after exhausting all other strategies to protect our balance sheet today and in the future. Your mission is to make decisions to survive now and thrive when we come out of Covid-19.
Having been through market downturns over my past 36 years leading sales teams I know how difficult these decisions can be. Admittedly I have never led a team though something like Covid-19 with so much uncertainty.
My recommendation is take a data driven approach to making these tough decisions.
I can tell you how I’ve seen teams reorganize their sales teams the wrong way. I have seen some teams look strictly at their forced ranking performance reviews. They identify those associates who scored the lowest and target them for downsizing.
The trouble with this strategy alone is you may be letting some people go you should be saving or could save with additional training and sales coaching. What I have observed is forced ranking performance systems often give you the wrong data.
The leading problem I have observed is many performance systems are subjective based on opinion and not data. They become popularity contests and sales managers protect salespeople like them. They keep the easy sales reps who act and think like the manager and often these are not top performers when you study transaction data metrics like profit per sale, new business, and return on sales expense.
With 50% of salespeople today receiving no sales skills training it should not shock us to learn most sales managers have not been trained. Without training in how to motivate, lead and coach salespeople all they can do is compare how this salesperson behaves compared to the behaviors they did when they are a salesperson. Add that many sales managers today came up through the sales ranks before the internet, before social selling and even before cell phones in some cases, they are often judging your salespeople’s sales competencies based on an outdated sales process.
What is my suggestion to solving this complex sales team right sizing, re tooling problem?
Consider many data points and leverage data to make decisions not gut and intuition.
You need to answer the question: Do I have the right salespeople in the right roles?
The author suggests you make sure and understand the unit economics before you lay anyone off or terminate their employment. She suggests a thorough evaluation by solution, market, and customer segment.
Another mistake I see teams’ make when the CEO tells the CFO I need $XXX, XXX in cuts. The CFO runs sales by salesperson descending report. The CFO and Sales VP look at the Excel spread sheet and draw the line. Everyone above the line stays and everyone below the line is laid off or let go permanently.
Although they are using data to make difficult decisions, this process is often not the best for the long-term health of your sales teams’ results.
Many times I have seen the top salesperson by revenue is not the most skilled salesperson on the sales team. Often this person is someone who has been on the team the longest and or manages some of the largest accounts they were given years ago. Although they may carry some of the largest revenue numbers they often have poor farming or hunting skills. They often lack business acumen to have business discussions with buyers to help them build a business case to fund the purchase investment.
If you are sold on just running an Excel report and drawing the line…let me ask you a question to consider.
Of the salespeople above the line, if you were asked to open and grow a new sales territory would you choose them?
When I have asked sales leaders and sometimes CFO’s this question I receive an uncomfortable…No.
This method of restructuring and retooling your sales team does not identify team and individual skills gaps and therefore does not help you close gaps to help your sales team become more efficient and effective after Covid-19.
Again a sales assessment that measures sales skills competencies, motivations and beliefs coupled with sales transaction data and past performance data is the best method to make these hard decisions.
I use a tool called a smart sizing tool that considers the following when restructuring and rightsizing sales teams when necessary :
Revenue
Pipeline health
Sales skills
Sales beliefs
Sales motivation
Performance to KPI’s last 12 months
Compensation
Consultative sales skills
Ability to work remotely, virtually
Value based sales verse selling on price
As Rebecca Hones shares in this excellent and timely article we have 4 categories of people decisions when we face a crisis like we are in today as we discussed above.
Some of the leaders I speak with that serve the food industry and medical supplies and safety products industries have not seen a decrease and some have experienced a slight sales increase in the last 30 days.
If your business has not been disrupted and or is actually increasing consider yourself blessed.
I suggest this is a good time for you to assess the skills, beliefs and motivations of your top sales performers and strategically use this data to recruit new salespeople that match the sales DNA of your top performers.
If you find yourself and your team needing to make the tough decisions and wantt help with a data driven tool that helps you explore various sales organization structure scenarios, please contact me. Leveraging the smart sizing tool we can get you the insights to make current and future sales structure decisions within one week.
There is one other critical data point market leading organizations need to consider when reorganizing and retooling their sales organization and most teams do not even have it on the list right now.
In my next post I will share this additional information to ensure your sales reorganization drives the maximum value for your team.
