I was recently in a conversation with an HR Director from an international organisation that was having challenges with the performance of their sales team, nothing new here.
I asked some fairly straightforward questions with regards to what was it about their performance that wasn’t good enough, how they approached their job, how they were remunerated, what level of training they provided etc…. Mostly I got fairly monosyllabic answers, they can’t do this & they should do that – the disrespect and disdain was palpable; again, nothing new here. Been there done that.
The discussion (or lecture from her) continued and I asked what the sales people were measured on – it was like a light switched on and the HR Director got a little more animated and excited …”we measure everything…. how many phone calls they make, to whom, for how long, who are they calling, where are these people in the pipeline, what are their conversion rates, what is revenue/profit margin…by product, sector, customer, geography” the list went on & on.
A little further into the conversation I asked what the organisation’s employee turnover was…. to which the response was “…. Oh we don’t measure that but I have been here 8 years, such & such has been here a year and him 2 years and her 2 as well…….”, as HR Director I’d have thought it would be a critical measure.
My problem and my experience is twofold:
In a paper by the Miller Heiman Group titled “Why you’re measuring too much?” Donna Walker says that businesses need to simplify what they are looking for or risk overwhelming sales teams. She advises to pick 3 – 5 measures around “leading” NOT “lagging” indicators. Statistics from a recent survey were that 45% of sales performance metrics were aligned with overall company objectives, in world class organisations the number was 93%.
In one of my previous lives my sales team had 27 different KPIs we were measuring/administrating ourselves to a standstill. It is a lot like try to herd cats or as Confucius says “ if you give someone two rabbits to chase they will catch neither…”.
The other “interesting” aspect of this is that whilst HR (in this case) were happy to put measures on other parts of the business they were not necessarily concerned about a fundamental metric associated with their area of responsibility/accountability.
The company I mentioned above were looking for their third National Sales Manager in 4 years, I smell a problem.
In a study by Deloitte Access, they recently reported:
Australian companies are drowning in their own red tape, wasting valuable hours of employee time and costing the economy billions of dollars. Red tape in both Australia’s public and private sectors says regulations imposed by:
- government cost about $27bn pa to administer & $67bn pa to comply with.
- businesses themselves costs $155 bn pa – $21bn to develop & administer and $134 billion a year to comply with.
In this same report, Deloitte Director Chris Richardson said. “Businesses are wearing self-inflicted wounds,” and Advertisement with then Treasurer Joe Hockey stating Australia’s “non-productive” workforce is scarcely any smaller than it was two decades ago. These self-inflicted wounds includes employee turnover on the back of bureaucracy and micromanagement on the back of too many measures.
It is critical for businesses to decide on what is important and put measures in place to support their teams to achieve their objectives. This will ensure that they not only survive but also succeed because they know what they need to do and have the tools to get themselves there.
Perhaps it is better to follow the advice from @Christina Guidotti (Partner of Thought Leaders Global) “…..to be more productive, focus only on the things that matter.”