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Move up and to the right: Why clients succeed with sales performance management

Director, Sales Performance Management, IBM

I love visiting our clients. Even spending just an hour hearing about their journey with IBM Sales Performance Management (SPM) and the expected, and unexpected, benefits they’ve discovered along the way. I always learn something new about our solution and how clients are using it. One of the most fascinating lessons from these conversations is how our clients move “up and to the right”—a great expression that graphically illustrates increasing results and accomplishments. Clients set off on this SPM journey for a range of reasons—often because of a “trigger” event or realization, a significant shift in their business or risk assessment, or sometimes even the failure of their existing system. The following are just a few of the many lessons and insights I have attained from talking with our clients and helping them enhance their sales performance management for growth.

Triggers and expectations

The start of a client’s SPM journey is usually defined by “triggers” and “expectations”. These triggers might include a major shift in sales strategy that requires different compensation plans and tracking that the old system simply cannot cope with. For example, a shift to “digital business” or incorporation of multi-layer distribution strategies, may lead to a desire to reduce the significant overhead associated with manual (i.e. Microsoft Excel) processing of compensation, enabling the Compensation team to be more strategic and have higher impact on the business. It might be because they are growing—either the sales team or volume of sales, through acquisition or organically—and they need the kind of performance our SPM system can help them achieve. Alternately, for clients in the Finance sector, “fines” may have been incurred because of new legislation based on paying people “appropriately” and transparently.

These are all great reasons to start the journey, and often form the basis of a business case which garners Executive sponsorship and starts our work in earnest. Often clients will also talk of the top line impact they expect: growth in sales that will come from clarity or time saving (for example, removing individual sellers shadow accounting), or the powerful strategic connection—linking market goals and approach directly with compensation plans, short term incentives, etc. It is interesting that while some clients will include these top line growth benefits in business case, as they can be significant, others will avoid including them in the hard numbers and mainly talk to the potential here. In some cases, this is due to internal pressures to then take on increased revenue goals and lift quotas. On our SPM maturity curve (see Figure 1) these triggers and expectations define the movement of an organization, and its sales performance, from “chaos” to “effective”.

Figure 1: The Sales Performance Management maturity curve

 http://www.ibmbigdatahub.com/sites/default/files/figure_1_38.png

Beyond the expected

Visiting with clients after the implementation, as I ask more questions, it’s fascinating to uncover additional (often unexpected) areas of benefit. As this first layer of expected “hard” benefits is delivered—moving clients “up and to the right”—what’s fascinating to me are the associated cultural and analytic impacts. I’ll cover a couple of these here.

Culture and trust

For sellers to be effective they have to believe in what they do, and believe the company they work for trusts them and they can trust it. Many great books have been written on the business value of trust, such as Business at the Speed of Trust by Stephen Covey. I believe that the impact of a “culture” of “trust” is significantly magnified when it comes to a sales team.

Your sales team is the critical link between your strategy and execution. How they “feel” and what they “believe” will directly impact the relationship with clients. Clients, even those with rigorous scoring methodologies, cannot help but be affected by what they see (and sense) in your the sales team. Thankfully we are in an era which really ‘gets’ the true impact of culture and values on the performance of our teams and larger organizations; one which causes us to make distinct these “human system” aspects of our leadership. The IBM SPM team recently produced a video that focuses specifically on the importance of delivering trust with sales performance management solutions, and removing the ‘fog’ that often exists around objectives for sellers, through to clarity on their actual payments. It is significant that clients often speak to me of this benefit. They emphasize how the implementation has made it possible for sellers not only to understand their plans better, but for organization to be able to adjust and add to their plans in a very transparent way—impacting behavior, and therefore results—moving the business “up and to the right”.

Analytics advantages

Analytics is not typically mentioned in the business case for Incentive Compensation Management (ICM) solutions. However, clients often speak to me about their realization of the potential value of the data they have amassed inside their ICM solution and—in particular—of the insights they have been able to deliver to positively impact their businesses. To state the obvious, ICM solutions deal with payment information: taking sales and other key metrics, product and organization structures, outputting directly to payroll systems with no manual ‘adjustments’ on the way. For this reason, the data that exists in ICM solutions is of high quality—typically having been scrubbed/corrected on the way into the system. This cleansed “Single Version of the Truth” ICM data is hugely valuable. Clients can leverage this through standard reporting in the solution, or take it to the next level and click the “Export to Watson Analytics” option for advanced exploration and understanding using freely available Watson Analytics software. Clients have been able to spot correlations and, in one case, even provide complex reporting to federal authorities. These insights lead to improved business performance, moving them “up and to the right”.

I started by saying I love listening to clients and learning from them. As we learn from our clients, we gain the ability to see the unfolding potential of our SPM solution, enabling us to enrich the journey even further for them. For example, right now we’re diving into ways to increase the performance of sales teams by looking at “human aspects” of engagement and enabling solutions. In particular, we are further developing the value of analytics in the SPM space—how can we provide increased visibility, awareness and insights as we expand both Watson Analytics and the potential to leverage ICM data for insights and growth. Today, we are bringing all of these lessons and insights together in next-generation technologies for the new era of cognitive computing. Taking strong foundational systems like ICM for structured data, unstructured data and the capabilities of machine learning to go beyond our current understanding of SPM. It’s going to be quite the journey!

IBM SPM: Up and furthest to the right

While my real scorecard for how IBM SPM as an organization is performing comes from talking to our clients, and lessons learned from their outcomes, we also have another very visible assessment that I believe validates our accomplishments: Gartner Magic Quadrant. Each year, Gartner Analyst Tad Travis does a rigorous job of assessing the organizations in this space, and weighing up their key qualities of Vision and Execution by working with vendors and meeting with clients. This year, I was really pleased to see that the assessment mirrored my own assessment of our progress…namely “up and furthest to the right”.

In the 2016 Gartner Magic Quadrant for Sales Performance Management report, IBM increased in “ability to execute” and was positioned furthest to the right in Completeness of Vision in the space. In my opinion the achievements of my IBM SPM team, and especially the accomplishment of customer benefits, are mirrored directly in this assessment, which is fabulous to see.

I’d love to hear from more clients who have implemented ICM solutions. Do these “expected” and “beyond expected” benefits resonate with you? Have you identified more lessons from the work you’ve done? Please let me know!

Learn more about how IBM Sales Performance Management solutions can deliver the analytics and insights to optimize your organization’s sales and drive growth.

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