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| Home - Industry Article - Oct 04 Issue |
Are You Bowling With a Banana?
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The answers might surprise you. Although it might sound counter-intuitive, our experience is that an average performer will actually do worse with a larger territory. On the surface, more territory with more leads should equal more sales. In reality, however, larger geographies create time and activity management conflicts that are beyond the grasp of all but the best performing salespeople. Poor performers can hide behind bluebirds in big territories and rookies often ‘stake out’ their geographic boundaries with activity that is better concentrated centrally. Effective plans are based on the assumption of average productivity and those plans are exceeded through a combination of good people and superior execution.
Said another way, if you roll the ball down the center of the lane, you’re bound to knock down a bunch of pins. And, in bowling if not in planning, you get a second chance if you don’t get a strike.
So far, we’ve used only two factors, so let’s introduce one more variable; compensation. Don’t worry about whether it’s for direct salespeople or indirect channels for the moment. How do you know if your compensation plan is fair? Try charting three elements on a graph: by territory, compare revenue and total commission earned (you’ll probably want to use a separate Y axis for the commission data to make the chart easier to read). If there’s a clear correlation between revenue and reward all across the board, consider yourself lucky. Most of the companies we see have more than their fair share of mismatches -- cases in which lower performers happen to have high earnings, and high achievers who earn less commissions than some of their peers. Sometimes tidbits of information like this get lost in the cracks, but if you chart your results, any mismatches will stick out like a sore thumb.
What can you do to make your plan predictable?
Don’t plan in a vacuum -- get multiple opinions early and often. Complete your first draft, but don’t try to perfect it. Make ‘coaching’ and review a part of your planning process. Here’s how: Take your draft plan and host a ‘rip it apart’ session. You’re looking for holes at this point, not elegant refinements. Get people together from finance, development, customer service, marketing, marketing, R&D, and quickly summarize the plan for them.
Instead of simply asking for group input, however, structure their reaction. If you don’t give them structure, the strongest personalities will prevail, and that may doom the exercise. Instead, ask them all to look at the plan through the lens of a single perspective. Go around the room and get their reaction to each question before moving on to the next. What will the existing customers think? How will they react to the enhancement installation schedule? How will prospects react? What about your sales and indirect channel – what will they like and dislike? You might be surprised to find that your finance person doesn’t believe your product delivery assumptions, or that your customer service guy knows your star salesperson is looking for a job... Whatever you learn, it’s vital to get it on the table early.
The more ‘fresh eyes’ you have participating in your planning process, the more likely you will avoid forgetting something.
At the end of the general feedback session, share the bowling analogy. Describe the ball as the sales and channel management plan. The pins can be prospects or competitors, to be either amassed or destroyed. Any month you make plan is a spare or a strike. If this approach doesn’t help you to better communicate the complexities of the planning process, at least it’ll bring a smile to their faces. Better still; take them down to the lanes and bowl a couple of frames.
Jim Watson joined CMEA Ventures as General Partner in 2001, and is on the Board of Directors of Apriso, iSuppli Inc., Key Research, and Teros. Prior to joining CMEA, Jim was consultant to several professional services firms and venture capital partnerships in the areas of strategic planning and partnering, board development, and supply chain management. Jim was also one of the Founders of Monterey Bay Partners, a venture management firm specializing in high technology start-ups. Prior to that, Jim founded Skyway Systems, a high technology logistics company. Jim can be reach for article feedback at jim@cmeaventures.com
Tate Holt has nearly thirty years of successful leadership in positions ranging from executive and general management to marketing, sales, product development, and finance, as well as being a member of the Board of Directors of several public and private companies. His experience ranges from Fortune 100 companies to startups and from managing turnarounds to rapidly growing companies. He has led business development and operations in more than 40 countries, and been involved in dozens of mergers and acquisitions. Tate can be reach for article feedback at tate@thebusinessdoc.com
 
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