Consumers aren’t the only ones who may be overspending their bank accounts. A growing body of research from our sister program for Corporate Communicators (CEC) suggests that repeated organizational shuffling across the past few years may have exhausted the “Engagement Capital” many business leaders have to work with (think of engagement capital as the degree of optimism an employee holds about past, present, and future events at their company).

Simply put, many of us are pushing internal changes through on disgruntled workforces that no longer have the stomach for it. We are morale-ly bankrupt.

Here are some of the facts as they play out for Sales…

First, more than half of our reps have probably experienced multiple, major changes in the past year – such as a new manager, a different role, a merger with another company, a new sales process, or a restructured team.

Second, these changes are stressful, and stress costs money. In fact, more than 60% of salespeople say that their level of workplace stress has increased in the past two years, and this may be creating an overall drag of as much as 9% on performance.

But why is the stress of change having such a debilitating impact?  After all, change happens right? Salespeople should be able to deal with it. But it turns out that it’s not so much the magnitude, but rather the frequency of change that is a problem. Read More »

(This post was written by Tim Stafford of our Finance and Strategy Practice.)

Last month we looked at how everyone can learn to be more influential in their roles, but we have also seen from our work with executives that there are some straightforward lessons that will help managers be more influential.

As well as helping to get tasks accomplished effectively and quickly, these four tactics are useful ways to get more from your team without offering financial incentives.

Four Ways to Get More From Your Team

1)  Get personally involved: One of the biggest lessons we’ve learned from talking to managers all around the world is that employees invariably respond well to personal interaction. One former CEO wrote recently about the power of face-to-face meetings. Managers tell us what a big difference it makes when they make a trip to meet team members or, even better, convene the entire team in one place for a few days.

People respond much better to questions and requests when they’ve had a chance to put a name to a face. Also meeting each other in person gives the whole team a chance to better understand personalities and context for the hundreds of phone calls, emails, and videoconferences that will follow in the months ahead.   Read More »

Note: This posting was written by Matt Dixon & Brent Adamson for the Harvard Business Review.

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Every leader knows that the compensation plan plays an important role in recruiting and retaining the best talent. But what these executives often don’t realize is that how they communicate about pay can be as important as the plan itself.

We saw dramatic evidence of this in a study conducted by our sister program, CLC Compensation, which looked at sales comp. The perceived fairness of the pay (that is, whether it was determined equitably, consistently, and predictably) had a 20% greater positive impact on reps’ commitment to their job than their satisfaction with the pay amount itself. A fair payment scheme, it turned out, was a more powerful motivator than a generous pay scheme.

When it comes to using compensation to boost performance, then, sales executives should focus less on the payouts themselves and much more on improving reps’ belief in the fairness of the process used to determine those payouts. But how?

Read the rest of this post on HBR.

The storied Green Bay Packers will be playing in the Superbowl against the equally storied rough-and-tumble Pittsburgh Steelers.  The stage is set for a great Superbowl, which has become an increasingly global event. To shed a bit of light on the Green Bay Packers, one only needs to turn to their great coach, Vince Lombardi.

Lombardi coached the Packers from 1959 to 1967, and in those 9 years the team won 5 league championships. Many consider him the greatest football coach of all time, perhaps the greatest coach of any sport of all time. What’s indisputable is his name being synonymous with excellence.

Lombardi had a gift with words and a legendary ability to inspire his team. In these days of process, and systems, and all the science we bring to Sales, it’s easy to lose sight of the role that fundamentally great leadership can play in team motivation. For many of us, our year is now officially underway..the budgeting, the planning, the preparation is done. It’s time to execute in 2011. Let Lombardi’s words inspire your leadership: Read More »

(This is a guest post by Lara Ponomareff of the Customer Contact Council, our sister program for heads of Contact Centers.)

This is the time of year when many member companies are completing their annual performance reviews, and it’s gotten me thinking about talent.  More specifically, our high-potential talent and how to keep them around. 

And the news from our sister program for heads of HR, the Corporate Leadership Council (CLC), isn’t good.  In a recent article in the Harvard Business Review, their study of over 20,000 ‘emerging star’ employees found some startling facts:

• 1 in 3 high-potential employees are disengaged from their job – and are far less productive as a result
• 1 in 4 intends to leave their current company within the next year
• 1 in 5 see a misalignment between what the company wants and their own personal aspirations

Sound scary?  Well, it definitely got my attention.  And it got me thinking about what we can do to swing these statistics back in our favor.

CLC outlines six key mistakes organizations make when developing high-potential employees – and ways organizations have overcome these barriers.  One mistake caught my eye in particular –  Mistake 2: Equating Current High Performance with Future Potential.

CLC data found almost 70% of high-performing staff don’t have what it takes to be successful in their next role.  We know who those people are – and we likely promote them all the time, like the star rep who, as a manager, doesn’t listen to or develop his team.

So how do you screen for someone who has high future potential?  Read More »

Compensation is the number one reason why sales talent joins – and, in many cases, leaves – your organization. But with most companies revamping comp plans every year, it’s tough to ensure that your plan isn’t falling behind the pack.

To help you keep your compensation plan competitive in 2011, we’ve developed a list of the 5 keys to effective sales compensation plan design.

Here are the highlights:

1) Set Challenging, Yet Achievable Goals: Aim to have roughly 50% of the sales force hit goal. Goal achievement levels beyond this benchmark signal that goals are too easy, but less than 50% damages rep morale and leads to turnover.

2) Prioritize a Few Key Metrics: Include no more than 3-4 metrics in any compensation plan, and be sure that one of these is either gross revenue, profitability, or sales of specific products. Companies with more than 3-4 metrics in their plans find that reps become confused about how to spend their time.

3) Stay in the Variable Pay “Sweet Spot”: Set variable pay at 20-40% of total target compensation. Reps underperform when less than 20% of their pay is at risk, but they also become dissatisfied with the plan beyond the 40% variable mark.

4) Reward Your Star: Star performers should receive 2x-3x the pay of an on target performer. Pay leverage at this level is enough to satisfy stars without demoralizing core performers.

5) Over-Invest in Compensation Plan Communication: Ultimately, effective communication from line managers on how pay is determined and how fairness is ensured is more important to reps than plan design.

For more guidelines on compensation plan design, please see our 20 Principles for Designing and Maintaining Sales Compensation Plans.

I recently had a member ask me this …

“Tom is one of the best reps we’ve got. In the past three years, he has exceeded every target that’s been assigned to him. But recently, his performance seems to have slipped. He barely manages to hit his goal and has almost stopped going that extra mile. We’re worried we may have burnt him out!”

Now, there can be many reasons to why Tom is underperforming.  We discussed the economy and how things were only beginning to look brighter. We spoke about compensation and how that might affect performance. We even tried to speculate if everything was okay in his personal life.

But none of it seemed to quite hit the nail, till we came to his manager.  The member told me that Tom’s previous manager had resigned, and the position had since been filled laterally by a sales manager from another division. Further probing revealed that the company had heard a few disgruntled voices from his team, but hadn’t taken it up very seriously. We took a closer look at what they had heard from his direct reports:     Read More »

With an increasing number of indicators suggesting that the world economy is slowly heating up again, many sales leaders are facing a very different talent market than we had in 2009.  And this could be a very big problem.

Here’s the way I see it:

1.) We’ve trimmed our sales teams down to the bare minimum, asking salespeople to deliver the same results with substantially fewer resources.

2.) We’ve let go of many of our low and average performers, leaving a talent bench that is comprised of a greater proportion of stars than ever before.

3.) Meanwhile, the stars in our sales force are precisely the ones most difficult to engage and retain.

Indeed, the statistics suggest that many of our stars in fact do not intend to stick around. Ongoing research by the Corporate Leadership Council, our sister program for HR execs, suggests that one in four top-performers plan to walk out the door within the next 12 months. Sales specific data cuts show that 10% of salespeople were already making phone calls and sending resumes to other employers as early as September of last year. As one member summarized to us, “We’re sitting on a powder keg of sales personnel churn, and the only thing keeping it from exploding is a weak labor market.”

Our guidance? Keep close tabs on your employee churn numbers, particularly for your stars. As I suggested in my previous post, double-down on efforts to engage high-performers by providing them with continuing stretch opportunities. And avoid these common mistakes with your stars:  Read More »