The People Performance Pyramid
Many sales leaders divide salespeople according to their results into three groups. First, the top 20%. These are your seasoned reps who possess professional skills, use technology effectively , follow a proven process and rely on their high drive to succeed. The result: these reps always exceed their quota.
Second, the mid 60%. These are your average reps whose skills are average, they use technology adequately, they follow an inconsistent process and have an average drive to success. The result: these reps achieve their quota inconsistently.
Third, the bottom 20%. These are the salespeople who predictably underperform for a variety of reasons.
The best sales management strategy: Give the top performers the best tools and let them learn from their successes. Bring the best practices of the top performers to the mid 60% to give them a higher chance of being successful. Replace the bottom 20% through ongoing recruiting methods.
The Corporate Performance Pyramid
Take 100 companies from different industries and rank their performance according to their results in their markets. You will arrive at a similar performance pyramid.
First, you will find the top 20%, these are the companies that enjoy double digit growth. Companies like Oracle, Salesforce.com, Apple, Merck, Neogen, Quality Systems, Ebix, and Best Buy are double digit growth companies.
Second, you will find the mid 60%, the single digit growth companies like ADP, Dell, RIM, IBM, Microsoft, RightNow, Kohl's and many more.
Third, you will find the bottom 20% companies that show single digit or double digit declines in sales such as Eastman Kodak, Blockbuster, Garmin, Xerox, Eaton, GE, Callidus, and Caterpillar. These are the companies that are struggling in the market and they are at risk of becoming a victim of change.
What can we learn from Double Digit Growth Companies?
These companies have optimized people, process and technology and they have embraced Sales & Marketing 2.0. For example, Hewitt Associates researched the best practices of companies that have enjoyed double digit growth and found that these companies are far more likely to use a data-driven process throughout their sales organization. These companies have established a culture of measurement where decisions are not made based on hunches, but based on metrics.
Action step: Learn from the playbook of double digit growth companies
What can we learn from Single Digit Growth Companies?
These are the many companies that rely on sales organizations that are run based on haphazard processes, where managers are in their 50’s and 60’s who are still conducting old methodologies of doing business. They have not fully embraced technology and they want to lead their sales teams based on the old model of command and control. These borderline obsolete managers don’t look for outside help, they wonder why the world has changed around them and why many of them are looking forward to their retirement. According to the study conducted by Hewitt, “In some cases businesses don't really care what happens inside a capability as long as acceptable service levels are achieved at a reasonable cost and unless it directly affects their brand value.” In other words, these companies face one or several challenges such as
- The existing sales talent is not capable of competing effectively
- Their sales processes are too slow, too complex and not optimized
- The available technology is not sufficient to deliver optimal results
Action step: Send your Sales and Marketing VP to the next Sales & Marketing 2.0 Conference in San Francisco on November 8th and 9th to get exposure to sales and marketing leaders who know how to optimize people, process and technology. The best way to achieve double digit growth is to network with leaders who have done it year after year. (Note: this conference is growing by 50% year over year)
What can we learn from declining companies? For example, in 1999 Kodak employed over 78,000 people, sales were $14 Billion, and profits were $1.3 Billion. Fast forward ten years. In 2009 Kodak posted a loss of $246 million on sales of $8 Billion. The workforce declined to 20,250. Over 58,000 jobs were lost in ten years. There are many reasons for this uncontrolled decline. The company missed the rapid shift from film to digital and failed to cash in on the emerging new technologies. In just ten short years, the company turned from a market leader into a victim of change.
Action step: If you are in a similar situation, hire a transformational leader who can help your shrinking company transform by creating a successful business model that leads to sustainable growth. There are many examples where companies get sidelined by massive shifts in technology – and some recover by adopting the mindset of startups.
Check out this newly released book Business Model Generations.
Bottom line: Sales & Marketing 2.0 companies build smarter business models; they enjoy greater customer success and greater sales success.
Self diagnosis: Is your sales organization suffering from these 10 Productivity leaks?
Take a moment to review the map of most common productivity leaks in sales organizations that are currently not growing at double digit levels. The data below reflects the average performance standards of double digit growth companies.
Next: A roadmap to Sales and Marketing 2.0 Success
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