Improving the Sales Organization's Change Readiness
April 08, 2016
Meeting the Change Readiness Challenge
Sales organizations face a constant challenge responding to changing selling techniques and markets. In meeting this external change readiness challenge, businesses need to effectively manage internal changes to their organization, technology, and sales behavior.
So, how best to meet the challenge? In this article we set out three key elements for successful change management– gaining a clear understanding of the change challenge, understanding and improving your change capability, and effectively managing and delivering change.
Many companies underestimate the change challenge and respond only tactically with the emphasis being on a quick response to a challenge often seen through rushed amendments to the incentive plan or hiring new people. These tactical changes rarely have the desired impact. The more productive and effective approach is a strategic one as we set out here.
Understanding the Change Challenge
Many companies are unrealistic about the scale of the challenge they face. Change, especially technology change can be very complex. Typically, there is an underestimation of the required breadth of impact, capability, funding, and the quality of communication required to gain buy-in from staff.
The scale of the change challenge needs to be conceived around three aspects.
- Assessing the degree of change – Understanding the urgency of change, the degree of change to the direction to business, and sales strategy. For example, new product launches or geographical expansion.
- Required level of change - Understanding the degree of internal change required including sales organization, incentives design, business process change, and some most significantly technology change.
- Experience level – How experienced is your team? What is the level of the organization’s experience of successful change management and communications capability. KPMG’s Survey of managing People & Change identified that 86% of the reasons why projects failed were related to how people were managed through the change process.
The cost to the business of having a low change capability can be really high. Costs can be risk/cost based through out of date, manual processes and poor compliance. Costs can also be operational through inability or slowness to respond and an inability to manage new complexities. Costs can ultimately be strategic with sales targets missed, sales strategy not fulfilled and lost customers.
Developing Change Capability
Imagine a vision of the future…. A world where a salesperson is completely aligned with the business and its goals, where they have complete visibility and faith in process that they’re enabled to do their job effectively, where administrators of the compensation system don’t spend time looking at issues and fixing issues, but are actually modeling, forecasting and contributing to the business moving forward, where management get insight into actionable information on rep performance and plan effectiveness and where changes to plans, targets and territories can be made seamlessly.
To achieve this vision businesses need to be systematic about understanding their current Sales Performance Management (SPM) or Incentive Compensation Management (ICM) capability and developing a realistic definition of the desired future state capability. As we know, SPM is a ‘broad church’ spanning talent acquisition and development, sales process, Territory and Quota Management (TQM) and incentive compensation design and management. Our experience is that many organization both overestimate their current capability and the degree and speed to which they can develop an enhanced future state.
In order to achieve a strategic advantage, technology, organization, business process, and reporting/analytics must be integrated across SPM. We must be able to articulate this for our own business, for example:
- Talent Acquisition – Great role definition, flexible structure, market reach for talent through social media and agency networks.
- Talent Development – Learning organization mentality, individuals driving their own development so that they take responsibility for their ability to deliver performance through the change process.
- Sales Process – Agile response to the market through mobilization of predictive analytics
- TQM – High modeling capability to deliver new territory alignment and quotas. Also mid-year quota adjustments that are fair and motivational.
- Incentive Design - Which is effective in multiples scenarios – growth, consolidation, new product, value, or volume driven.
Having a high level of SPM capability greatly facilitates an organization’s ability to manage and deliver effective change.
Implementing Change Effectively
There are a number of key ingredients here beyond understanding the change challenge and developing the right level of SPM capability. These include executive buy-in and change leadership, effective funding of change, planning and organization of change, and effective communication of change to stakeholder group. In a recent webinar-based survey conducted by OpenSymmetry and IBM with the SMA, attendees were asked to identify the most difficult aspect of change management. The top 3 aspects were:
- Effectively communicating change and gaining buy-in from staff – 38%
- Having the right change capabilities – 32%
- Identifying the roadmap required to achieve successful change – 19%
Successful change management means joining the SPM dots. Many sectors are transforming the way they go to market. Leading case studies include tackling sales organization redesign, incentive redesign, and TQM redesign along with technology deployment in an integrated rather than piecemeal approach. Sales organizations need a joined up story and an approach which shows due consideration of both individual and business level concerns and eventualities. Technology is playing a key role in joining change up across these sales capabilities and in speeding up successful change.
Successfully meeting the change challenge can be boiled down a few key ingredients. Firstly, understanding the change challenge for your sector and your business. Secondly, understanding your current level of capability across SPM and the level of Future State capability you need to deliver positive transformational change. This includes understanding what investment in technology you need to make to secure the target Future State.
Never underestimate the change readiness challenge
What are some of the biggest change challenges your organization faces? Let us know in the comment section below. Also, keep an eye out for the webinar recording Improving the Sales Organization’s Change Readiness, it will be made available on our website coming soon.