HR & Sales Partnership: Developing High-Performance

Sales People

Presented By Tom TiceTowers Watson

September 1, 2010

Sales People:Wheelers And Dealers?

1

Sales Forces In The U.S.

• There are approximately 14 Million full-time sales people in the U.S.

• Sales people represent 16% of the U.S. workforce• Companies spend $1 to $2 Trillion a year in

compensation cost for sales people

• Sales people are responsible for growing the top line in good times and bad

2

What’s So Special?

• Front line – company’s face to the customer• Impact top line like nobody else, and bottom line too• All about growth – cost management is secondary• Sales force issues are unique

– Sales force life cycles, rules of engagement, etc.– Perfect data link: Σ sales rep results = corporate

results• Requires a specialized body of knowledge and

competencies

3

“…fundamental DNA structure is different”

Sales Force Prominence Varies Based On The Selling Environment

4

PartnershipSelling

Consultative Selling

Need Selling

Multi-Level Selling

Post-Sale Selling

Relationship Selling

Pressure Selling

Feature Selling

Order Taking

Application-Oriented

Buyer-Oriented

Product-Oriented

Level ofComplexity

Sales RepProminence

. . . And Job Roles Change

5Products

Existing/Core New/Different

Buyers

Prospects

Customers Keepers

Finders

Growers

Market Makers

Product Specialists

UniqueSales Force

MarketSpecialists

Sales Coverage Models Evolve . . .

Lead Qualify Propose Close Fulfill Manage

Small

Mid

Large

Geographic Territory Sales Reps

In the beginning...Sales Process

6

Iterations Begin To Accumulate. . .

7

Lead Qualify Propose Close Fulfill Manage

Small

Mid

Large

Enterprise

Sales Process

Geographic Territory Reps

Named Account Sales Reps

Telesales

Account Coordinators

Coverage Becomes More Complex –And Expensive

8

Lead Qualify Propose Close Fulfill Manage

Small

Mid

Large

Enterprise

Vertical 1

Vertical 2

Telesales Reps

Sales Process

Agents/Distributors

Proj Mgrs

Cust Care

Named Account Sales Reps Account

Coordinators

Vertical 1 Specific Reps

eChannel

Vertical 2 Specific Partners

Telemarketing Reps

HR And Sales Must Act As Partners To Assure That The Sales Function Has…

9

1. The right people with right skills

1. The right people with right skills

2. Focused on the right opportunities with the right tools

2. Focused on the right opportunities with the right tools

3. Highly motivatedto execute sales strategy

3. Highly motivatedto execute sales strategy

l Programs, tools and processes to guide:— Hiring/ re-deployment / exit

— Feedback and coaching

— Sales Supervisor (people mgt.) effectiveness

— Talent development and career progression

— Base pay progression

l Sales strategy clarificationl Sales process clarificationl Sales role design and sales organization

developmentl Quota setting and allocation

l Employee Value Proposition assessment and designl Sales compensation assessment and design (often =

regional/global)l Sales compensation implementationl Sales compensation risk assessment and mitigationl Sales compensation governance

First, The Right People with The Right Skills …

10

l Uses career bands (e.g., professional, manager) and career levels (e.g. entry, intermediate) to organize and align roles across the organization

l Includes criteria to clearly describe each career level

l Clarifies the knowledge, skills and abilities required for successful performance

l Provides foundation for performance management, career pathing and planning, learning and development, and succession management

CompetenciesCareer Framework +

Indi

vidu

al C

ontr

ibut

or C

aree

r Pat

hM

anag

emen

t Car

eer P

ath

Professional/Expert

Entry Intermed Career Specialist Master Expert

Professional/Expert

Entry Intermed Career Specialist Master Expert

Technical/Business Support

Entry Intermed Senior Lead Supv

Technical/Business Support

Entry Intermed Senior Lead SupvEntry Intermed Senior Lead Supv

M anagement

Supv Mgr Sr Mgr Grp Mgr Sr Grp Mgr

M anagement

Supv Mgr Sr Mgr Grp Mgr Sr Grp MgrSupv Mgr Sr Mgr Grp Mgr Sr Grp Mgr

Executive

VP SVP EVP CEO

Executive

VP SVP EVP CEO

Productio n

Entry Intermed Senior Lead

Productio n

Entry Intermed Senior Lead

Career Framework + Competencies

Providing A Clear Career Path Helps Both Retain Sales Talent and Guide

Development Discussions

11

Sales/Sales Management

1st Level Manager

Team Leader

Entry

Associate

Career

Expert

S1

S2

S3

S4

S5

S6

S72nd Level Manager

Entry Level DescriptionGeneral Profile

Product & Sales Expertise

Selling Process

Client Orientation

• Sells less complex products and/or services

• Works within an assigned territory or customer base

• Has up to two years of sales experience

• Has basic understanding of business, service and/or products sold

• Has up to two years of sales experience; may have recently worked in telesales or out-bound call center and is transitioning to a field sales position

• Emphasizes the process rather than developing own sales approaches (e.g., make 10 calls a week)

• Typically makes sales calls from standardized “scripts” for some of the company’s less complex products and services

• Typically is responsible for a territory or group of accounts with more than 10 current and prospective customers

Providing A Dual Career Path Can Help Retain Top Sales People

12

Indi

vidu

al C

ontri

buto

r Car

eer P

ath

Man

agem

ent

Car

eer P

ath

Professional/Expert

Entry Intermed Career Specialist Master Expert

Technical/Business Support

Entry Intermed Senior Lead Supv

Management

Supv Mgr Sr Mgr Grp Mgr Sr Grp Mgr

Executive

VP SVP EVP

Production

Entry Intermed Senior Lead

Illustrative Career Path Based On Sales Competencies And Career Bands

13

Illustrative career path example – Sales

Supv Group Manager

Entry Intermed Career Specialist Master

Manager Sr Manager

Sr Group ManagerCareer

Bands VP

Product Specialist

Sales Rep I

Customer Service Rep I

Operations Specialist II

Associate Product Manager

Sales Rep II

Senior Operations Specialist

Product Manager

Sales Supervisor

Sales Operations

Project Manager

Senior Product Manager

District Sales Manager

Senior Sales Operations Manager

Senior Manager – Product

Management

National Sales Manager

Sales Operations

Director

Regional Sales Manager

VP of Sales

Customer Service Rep II

Senior Customer

Service Rep

Customer Service

Manager

Senior Manager – Customer

ServiceSales Support and Customer

Service Director

Senior Manager – Sales Support

Sales Support Project

Manager

Senior Sales SupportSales Support II

Operations Specialist

Sales Support I

Expert

CASE EXAMPLE

Sales Competencies Define the Knowledge, Skills and Abilities Required

For Successful Role Performance

14

CASE EXAMPLE

Commonly, we develop competencies for both sales and sales support . . .

Direct SalesCustomer and

Industry Knowledge

Relationship Management Solutions Selling Influence/

PersuasionDemonstrating

Value

Sales SupportCustomer and

Industry Knowledge

Business Process

Management

Customer Experience Consultation Implementation

By Scaling Each Competency, We Clearly Communicate Development Expectations

And Provide A Basis For Assessment

15

Competency Atlas, Towers Watson’s competency dictionary, can be used to develop the sales organization’s competency model

Influence/Persuasion – Creates compelling rationale to facilitate and motivate action toward a desired outcome

l Uses appropriate interpersonal styles and communication methods to gain acceptance from others for an idea, plan, activity, service, or product

l Seeks to understand others’ opinions, positions, and emotions to provide direction to solve problems and negotiate mutually-beneficial outcomes

l Gains support and commitment from others and mobilizes them to take action

Developing Supporting Applying Leading Shaping

l Learns to utilize various communication methods and recognize differing interpersonal styles

l Paraphrases others’ points of view to check for understanding and communicate areas of agreement

l Responds to objections with supporting data and information

l Uses a variety of basic communication and facilitation techniques to persuade others in straightforward situations

l Builds common ground by highlighting areas of agreement and focusing efforts on resolving areas of disagreement

l Clearly articulates the case for action and describes the benefits of a proposed plan

l Presents ideas and recommendations in a manner that clearly links to business priorities and gains acceptance from others

l Identifies and addresses key concerns from differing perspectives to develop mutual understanding

l Involves others in key decisions or plans to influence a desired outcome; ensures others feel they have contributed to the conclusion

l Identifies key motivators to direct others toward a point of view and generates new ideas based on differing view points to gain broader acceptance for ideas

l Diffuses emotional situations through focus on mutually beneficial solutions and identifying win-win outcomes for all parties

l Involves others across the organization, where necessary, to influence a desired outcome; ensures others feel they have influenced key decisions

l Modifies own behavior to accommodate situations and individuals in an effort to facilitate attainment of mutual agreement

l Demonstrates a balanced understanding of all sides of an issue or conflict and provides support and tools to help others move to agreement

l Defines expectations, goals and the future state to generate excitement and action from others, giving direction and purpose to others’ collective efforts

The Sales Competency Framework Needs To Be Tightly Aligned With Sales Strategy

– But Stay Flexible …

16

Individual selling Team selling &Cross-selling

Geographic Territory Assigned accounts

Transactional Selling Consultative selling

Order Taking Account Planning

Is This Our Strategy? Is This Our Strategy?OR

Competencies need to be integrated into how managers coach and manage their people . . . Let’s look at an example

Case Illustration: One Of The Fastest Growing Pharmaceutical Companies

17

“We more than doubled our sales force size in the last two years and are having a hard time attracting and retaining top sales talent into our organization.”

HR-Sales Partnership Challenge

Sales’ desiredoutcome: l A consistent framework for

organizing roles, with clear linkages to career management and talent programs

l Clear career paths and opportunities for all employees – demonstrating that employees can have a long and successful career with the company

l Enhanced succession management to meet the demand for leadership talent

ActivitiesHR Program Contentl Career-based competency model – career ladders + functional competenciesl Placement of roles into modell Refinement of existing competencies and leveling for each; role-specific competency

expectationsl Career paths and criteria for progression and promotionl Linkages between the career-based competency model and current talent management

programsl Compelling and motivational “story”Implementationl Branding

-On Track to Successl Communication strategy and campaign

- eCards- E-mail announcements- Reference guide

l Manager and employee training – three meeting eventsl Project management, including meeting facilitation and leadership briefings

Background

Case Illustration: Pharmaceutical Company (Continued)

18

Improved Recruiting and Selection

l Recruiting process was able to staff the rapidly growing organization

l Recruiting tools and communications clearly articulating career paths within the organization provided an advantage over larger pharmaceutical companies

Improved Sales Management Effectiveness

l Common set of competencies and expectations took the guesswork out of the process for managers

l Provided more time and better tools to effectively mentor and coach the sales organization

l Engagement levels increased for both sales reps and sales managers in the first year following implementation

Improved Succession Planning

l Developed formal high potential program and “fast tracked” many through the career paths

l Used formal assessments to rate sales and sales management staff on the key competencies and promotability

Results

“Best” Principle of Sales Force Competencies Development

19

How important is this competency to overall job performance in a sales role?

How frequently is thiscompetency required in a sales role?

Not

App

licab

le

Of L

ittle

Impo

rtan

ce

Som

ewha

t Im

port

ant

Impo

rtan

t

Very

Im

port

ant

Crit

ical

Not

App

licab

le

Annu

ally

Seve

ral

Tim

es a

Yea

r

Mon

thly

Wee

kly

Dai

ly o

r Mor

e O

ften

.

.

.

.

.

. 5

N 1 2 3 4 5 1 Competency Name N 1 2 3 4 5

N 1 2 3 4 5 2 Competency Name N 1 2 3 4 5

N 1 2 3 4 5 3 Competency Name N 1 2 3 4 5

N 1 2 3 4 5 4 Competency Name N 1 2 3 4 5

N 1 2 3 4 5 5 Competency Name N 1 2 3 4 5

N 1 2 3 4 5 6 Competency Name N 1 2 3 4

Criticality = Importance x Frequency

Linking Pay & Capability Development

20

• Vertical pay grade progression opportunity– Different role– Same role, but at higher level

of competency

• Horizontal pay progression opportunity– Range penetration based on

performance rating – Competency-based pay

progression within pay range

• Target incentive pay linkage– Job level / grade– Base pay

• No explicit linkage– Commission structure

• LTI linkage– Job level / grade– Discretionary (retention

vehicle)

Base Pay Progression Incentive Pay

The HR-Sales Partnership in Sales Compensation Design Projects

21

SalesBusiness

UnitLeadership

Sales Operations

SME

Human Resources

SME

Finance SME

Design Team

Steering Committee

Role of Steering Committeel Articulate corporate objectives and interpret

corporate policyl Make critical strategy decisionsl Guide overall direction of the projectl Review and approve recommendations

Role of Design Teaml Oversee ongoing project tasksl Participate in analytical processl Review/critique hypotheses, findings , and

recommendations l Identify and help gain access to, and

information from , any needed Subject Matter Experts

l Champion any needed data gathering, interview scheduling, and general navigation assistance

Role of HR Project Managerl Participate as a member of the Project Teaml Manage all aspects of the project to achieve

timely delivery of resultsl Lead all activities and Project Team meetingsl Create all meeting material and documentsl Provide perspectives on best practices through

research and data bases

The role of HR will be either Project Manager, or Co-Leader with the Sales

Operation Manager

The HR-Sales Partnership in Sales Compensation Design (Continued)

22

+ +

+ + + + +

+

Sales Strategy Sales Channels Sales Roles

External Surveys

Required Mix & Leverage Plan Design

Performance Measures Sales Goals

Payout Frequency

Sales Processes

“Top Row”

Single “Best Principle” for Sales Compensation

23

Difference between top

and average = 15% of target

Difference between top

and average = 150% of target

Improved Pay Dispersion

0% of target

200%of

target

Min Excellence

100% of target

Target

Poor Pay Dispersion

115% of target

Min Excellence

100% of target

110%

Typical Payout

Make sure that total cash is compelling and differentiated for your top performers

HR And Sales Must Act As Partners To Assure That The Sales Function Has…

24

1. The right people with right skills

1. The right people with right skills

2. Focused on the right opportunities with the right tools

2. Focused on the right opportunities with the right tools

3. Highly motivatedto execute sales strategy

3. Highly motivatedto execute sales strategy

l Programs, tools and processes to guide:— Hiring/ re-deployment / exit— Feedback and coaching— Sales Supervisor (people mgt.) effectiveness— Talent development and career progression— Base pay progression

l Sales strategy clarificationl Sales process clarificationl Sales role design and sales organization

developmentl Quota setting and allocation

l Employee Value Proposition assessment and designl Sales compensation assessment and design (often =

regional/global)l Sales compensation implementationl Sales compensation risk assessment and mitigationl Sales compensation governance

Questions?

25

Contact Details

• Tom Tice– Senior Consultant – Sales Effectiveness & Reward– Towers Watson– One Alliance Center– 3500 Lenox Road, Suite 900– Atlanta, GA 30326-4238– 770-864-3963– tom.tice@towerswatson.com

26