Exceeding Expectations in Sales

There was a feature article in Selling Power this month (July/August 2009) that outlined how to set expectations for sales people. This is a add on to my previous post "Sales Managers - Don't Shoot Yourself in the Foot." (7/29)

As sales managers in a transition economy you should do the following as Selling Power outlines:

• set expectations that are attainable with a stretch not unattainable or unrealistic
• goals should be tied to variables the sales staff can control
• goals should be customized to fit the salesperson situation or territory - goals should be broken down into small bites - management must sit down with sales people and show them a clear path they will take to achieve the stretch target
• if you have to adjust the goals based on economic conditions, re-motivate the team with a goal they consider to be fair.

So are you following these easy steps or are you totally or partially disrupting the dynamics of your team with new goals, alignments, and added duties that take their eye off the goal?

Sales Managers - Don't Shoot Yourself in the Foot

I spoke to a couple of colleagues this past week and there seems to be a pattern that has developed because of the drops in revenue, the economy, and tighter competition. Yes, you are right, tweaking or reorganizing the sales force.

Whether you are managing inside or outside sales teams be careful not to disrupt the rhythm a sales team develops over time. It occurs when teams have been together a while, know each others habits, flow of information, and group motivations. When you are trying to preserve and grow revenue you don't want to demotivate your sales teams by massive restructuring. The outcome will be fewer sales over the short term and depending on your team dynamics could provide less revenue over the long haul.

So be careful not to shoot yourself in the foot by doing a restructure or RIF that will demotivate a team that for all intensive purposes has performed in this tough and treacherous economy. I will continue to advocate, as I am sure you will, that you need to get rid of poor performers in an expedient manner and within the laws in your state. Nothing hurts a sales team than a performer that is dragging down your team and killing the drivers of revenue and profits.

Take a tough stand with lots of input from various sources if there is a need to restructure so you make sure your team dynamics are not impacted. What have you done in this area over the past 12 months?

Forbes/Gartner Study: Internet Is Key Source of Information for Business Executives

New York—The Internet is “by far” the most important source of business information for top executives, according to the Ninth Annual Forbes/Gartner C-Level Executive Study, released Wednesday.

The Internet was chosen by 60% of the executives surveyed as the most important medium for business information, according to the online study, which was conducted? this spring. More than 650 executives participated.

Only 15% of the executives identified daily newspapers as the most important medium. The Internet and newspapers were followed by trade publications (9%), magazines (6%), TV (5%) and radio (2%).

The executives surveyed said they spend an average of 15.9 hours per week on the Internet (excluding e-mail) for work and nonwork activities. Fifty eight percent of respondents said they access the Internet before they go to work, compared with 47% who indicated they read a newspaper before going to work.

a reprint from B to B.

What CEOs Want from HR Leaders

All successful corporations use HR strategically, not just to manage administration and other mundane HR tasks. CEOs are interested in growth, profits, innovation, and the ability to retain customers. HR is at a key position to help the CEO attain all of these objectives. To do this your time in the HR leadership role should consist of the following:

• discussing talent, retention, and talent development and pipeline candidates;
• compensation and competitive intersections of market and attaining the best talent;
• benefits, maintaining a competitive package and harnessing costs, especially health and 401K and pensions;
• identifying integration acquisitions quickly;
• anticipating critical business events and regulatory issues;
• guiding and maintaining a daily interaction with the CEO and key business leaders;
• understanding the dynamics of the economy and how they impact the business;
• and finally enabling growth drivers at the employee and business levels.

Are you doing these key functions on a daily basis? Let me know your thoughts.

How a Little 'Friction' Can Change a Competitive Landscape

For a business, losing a customer can feel a little like getting dumped. Questions linger: What did I do wrong? What does that other business have that I don't? How can I ever compete in such a cutthroat market? Well, maybe you do have too many competitors. Maybe thereis something you need to improve. Or maybe the customer simply has personal preferences that are not met by your business.

A recent research paper by Wharton management professor Olivier Chatain and INSEAD strategy professor Peter Zemsky offers some perspective on this topic by combining two types of business strategy analysis. Their advice: When developing business strategies, consider not just what your company does, but how it fits into its industry. Looking at both, you might find ways to improve and woo more customers. You might realize an opportunity to leapfrog over a bigger competitor. Or you might discover that your approach to the market is fine the way it is.

To read the full article please click on the link above. Great information in this competitive landscape.

'Next Practice' in Reward Means a Focus on Employees as Assets

What will the 'next' reward practices look like? A study by Hay Group and WorldatWork shows that in the coming few years, decisions in reward will be driven by the need to keep employees motivated and engaged despite tight resources and the fear of layoffs. The research reveals a renewed focus on managing human capital as an asset.

Conducted in the challenging first three months of 2009, this Hay Group/WorldatWork study found reward executives focused on the 'here and now': first getting labor costs aligned with the new economic realities, then preparing for future growth. The study revealed five key trends in reward 'next practice'.

From benchmarking to alignment

Firms have become less focused on what the market is doing and more concerned about aligning reward with strategy and performance. Amway International is trying to "find the right balance between employee motivation, cost control, and market competitiveness in our reward programs."

Taking the employee's perspective

Employee needs and wants are becoming more important as organizations seek to maintain motivation in a tough climate. According to McDonald's Corporation: "We design our reward programs, invest in new programs, and beef up current programs based upon the feedback we receive from our employees."

Strengthening the ties between pay and performance

Organizations in this study are looking much harder at the design of short and long-term variable pay programs. Comments from Heineken reinforce this: "We ensure that the objectives in our STI program are broad, simple, quantifiable and measurable and that they accurately reflect the key performance fundamentals of our business."

'Total reward'

Employers are looking to intangible rewards in their quest to keep the workforce engaged when budgets are tight. Collective Brands in the US plans to "provide much more focus on non-monetary forms of rewards and recognition. In tougher economic times, there will be a focus to provide recognition through non-monetary vehicles."

The key role of the line manager

As firms tighten their belts, they are realizing how line managers can help reinforce the pay-to-performance link and communicate the value of the reward program. Microsoft is looking for: "better support for managers to be able to better explain the reward programs and how they link to individual and company performance."

Where the jobs are: Opportunities for Everyone

You can find work — even in today’s economy. In fact, some industries, such as health care, are experiencing particularly good job growth.

According to Keith Emerson, managing director at Lee Hecht Harrison, the New Jersey-based global leader in talent management, “As the baby boomer generation continues to age, the need for health services will continue to grow. In addition, health care reform will be an issue at the forefront of Capitol Hill debates this summer, keeping the future of the industry in the media spotlight.”

Health care isn’t the only industry hiring. Work can be found in a variety of other fields too, including education, technology and engineering. Here are some of the best job opportunities available today:

• health care
• education
• accounting
• government
• green collar
• sales
• technology
• engineering
• legal

Opportunities for college grads

Although there are numerous areas of relative strength, the job situation is not as healthy as it has been in past years. According to CareerBuilder’s Annual College Job Forecast, 43% of employers plan to hire recent college graduates in 2009. That’s a drop from 56% in 2008.6 While the glass isn’t quite half full, many employers are still hiring, though it may take more work and perseverance to get hired.

Visit collegegrad.com to find job postings for recent grads.

You’re never too old

A March 2009 study by Harris Interactive and CareerBuilder found that while 68% of workers age 35 – 44 found new jobs within three months of becoming unemployed, only 46% of those 55 or older found new jobs in the same time frame.7 While older workers and retirees returning to the workforce may have a harder time finding work than many younger people, opportunities do exist.

If you’re in this age group, visit retirementjobs.com, which has a list of certified age-friendly employers.

Regardless of your age or life stage, there are jobs to be had, even in this challenging economy. But you need to know where to look and how to market your skills to match the position. "And don't forget," says Emerson, "that a positive attitude, professional presence and persistence can go a long way."

The complete article can be seen at http://budgeting-investing.ameriprise.com/financial-planning-articles/economic-events/current-job-opportunities.asp?CID=eViewPoint_Loyalty_Subs_0709

How Can You Find the Most Promising New Opportunities? Hold an Innovation Tournament

Financial innovation is often blamed for having landed the global economy in a mess, but it has also been said that innovation will get us out of the present downturn. Still, companies can be forgiven for feeling that spending time and money thinking about the "next big thing" is a frivolous exercise. After all, every dollar counts these days, and CEOs and their executive teams are busy enough just getting their companies through the day-to-day demands of the recession.

It needn't be that way, according to Christian Terwiesch and Karl Ulrich. As the two Wharton professors of operations and information management point out in their new book, Innovation Tournaments: Creating and Selecting Exceptional Opportunities, if done with greater focus, identifying new opportunities shouldn't be seen as a luxury, but a necessity. They note that creativity and process-driven rigor can actually go hand in hand when it comes to vetting and managing new ideas. One way to do this, they explain, is by making new ideas compete with one another in numerous rounds of vetting -- that is, by running them through "innovation tournaments" -- so that the strongest and most promising ideas make it to the final round.

Rich rewards await companies that make the leap. Among the innovative firms that the professors cite is the U.S. pharmaceutical giant Merck, whose cholesterol-reducing drug Zocor, launched in the early 1990s, has delivered gross profits of $10 billion on an investment of around $500 million.

THink of this as a Six Sigma test for your organization. Don't you think HR should take the lead on initiating this type of innovation with the product management group and the CEO?

Web 2.0 as an HR Strategy

Companies have increased their reliance on Web 2.0 technologies such as social networking, blogs and webcasts to communicate with and engage their employees, especially as the economic downturn has shrunk funding for human resources, according to the 2009 HR Technology Trends report by consulting firm Watson Wyatt.

The survey, which gauged the opinions of leaders at 181 large companies, found that since the start of the economic downturn, 61 percent of companies have increased their use of e-mail to communicate with employees; 32 percent have increased their use of Webcasts; 13 percent have increased their use of social networking tools; and 12 percent have increased their use of blogs for communication.

The survey also found that companies are adopting role-based employee portals the most rapidly, with 42 percent deploying or piloting the portals and 24 percent planning to adopt them in the next 24 months. The survey also found that while 86 percent of companies currently have an intranet, only 2 percent plan to implement one in the next two years. Rather, companies are planning to deploy technologies that are more personalized, such as blogs (13 percent), wikis (13 percent) and podcasts (10 percent) in the next 24 months, Watson Wyatt found.

I've heard many stories about shrinking HR budgets at federal agencies for quite some time, long before the economic crisis began, so I'm curious to hear from you all about the types of technologies your agencies are using to communicate HR policies and improve employee engagement.

Is this in your plans?

Covering Your Company from the Ledbetter Act

I attended a seminar late last month with our HR Executive Roundtable Group and the discussion with the presenter was on fair and equal pay as a prime topic. A great session I may add and a great presenter. As we all know, there are usually pay discrepancies within our organizations and with the signing of the Lilly Ledbetter Fair Pay Act as well as the Paycheck Fairness Act you really need to do the following to cover your company from potential liability. Here is what you should do:

• conduct a pro-active pay diagnosis under attorney-client privilege to review reasonable measurements and develop business related factors to explain pay;
• consider remediation strategies to reduce risk;
• review and strengthen documentation of compensation decisions - a real must here;
• review current pay practices setting pay-on-hire, promotion, and demotion, developing tools to identify paired comparators;
• use compa-ratio, rate range differentials/penetration and how they interface with on-line performance measurements;
• consider that old compensation rule, lost in the years, broad banding; and
• consider using an outside firm to review your compensation practices and ranges.

These are just a few of the things you as HR leaders should be doing. Suffice it to say that large corporations have already done most of this but my concern is the small to medium firms that do not have the money or resources to review this important issue.

When was the last time you reviewed your compensation practices. Don't forget sales and commission people either.

Total Rewards Today vs Yesterday

Lots of employers are looking to intangible rewards in their quest to keep the workforce engaged and to retain high performers when budgets are tight and profits below expectations. Collective Brands in the US, for example, plans to provide much more focus on non-monetary forms of rewards and recognition. In tougher economic times, in general there will be a focus to provide recognition through non-monetary vehicles with most employers especially the mid-sized ones.

"We will keep monetary rewards for special occasions and focus on non-monetary as the norm" says Bernie Matherson of Excalibur Computer Sequencing.

Hard Times for HR

In the recent issue of Workforce magazine the lead article was about HR and the stressful times they have had over the past year. When you think about the issues you face in downsizing, salary freezes, restructuring, performance management you have to think of way to eliminate or reduce the fear employee have of HR. The article says HR has become the "Angel of Death" because of all the actions you have to carry out in your daily duties. There are ways to reduce this fear and I would like to offer some of them since I have had the same moniker place on me and my department over the years. Here are a couple of ideas:

• make sure you walk the floors daily
• interact with employees to minimize the fear by interacting with them
• hold skip level meetings to identify issues and stimulate business discussions
• don't hide behind senior management decisions
• take ownership in driving profitability and stimulate growth by getting employees input
• host management meetings with you as the moderator
• don't say "it was managements decision"
• help employees grow and participate

Think of out of the box ideas to get employees involved so they feel they have a part of the decisions. I know these things work and would think you would too. Email me your ideas on this very important subject. You should also read the article in the June 22nd edition of Workforce or at www.workforce.com.

BP's Fiona MacLeod: A Change Agent Sees Change 'Addiction'

After 20 years of experience leading change management programs in the U.S., Europe and New Zealand, BP executive Fiona MacLeod has concluded that the corporate world is "addicted" to serial change management programs that consume massive resources but ultimately fail to solve the problems they aim to address. "What really struck me is why so many of these change management programs fail," only to be followed by similar initiatives within one or two years, often before the original program is completed, said MacLeod, president of BP Convenience Retail USA & Latin America.

At the recent Wharton Leadership Conference, co-sponsored by theCenter for Human Resources and the Center for Leadership & Change Management, MacLeod urged her fellow leaders to ask themselves: "How can we ... free ourselves from our addiction to episodic change and move to a much more healthy habit of continuous business improvement?" She compared the phenomenon to a yo-yo dieter who loses weight only to put it back on because he has not come to understand what's causing his weight gain, or has failed to adopt the healthy lifestyle that would keep the weight off.

London-based BP is the third largest global energy company and one of six so-called "big oil" companies, with vertically integrated operations to drill for, refine and market petroleum products. Globally, BP reported revenues of $367.1 billion in 2008. Its ampm stores in the United States and Latin America -- the name is a reference to the fact that they are open day and night -- were launched by ARCO, the old Atlantic Richfield Co., a U.S. oil refiner and marketer that BP purchased in 2000. BP gasoline is marketed under the ARCO brand on the West coast of the United States. The company also uses the BP brand in North America and elsewhere, and the ARAL brand in Europe. In addition to gasoline, the markets offer the usual assortment of convenience store goods.

No 'Big Splashes'

Many change management programs are doomed to failure because "the change we are putting in place is not sustainable -- and sustainability is absolutely crucial," noted MacLeod, who is based in La Palma, Calif. Change initiatives wither in an organization for several reasons:

• hangeNew leaders are often more concerned with "making a big splash" than with following through on a long-term plan to monitor change and keep the program on track.

• Organizations often revert to old habits because employees do not understand why change is needed, or they lack the tools and training required to sustain the new approach.

• Nothing changes because ownership of the change rests with an external team or consultants, rather than with the leaders responsible for running the business.

MacLeod urged managers to attend to "the soft side of change" by putting in place programs to fully engage leaders and employees in the process of creating change and sustaining it over time. "As business leaders, we're very good at the rational part" of change: Identifying what's wrong and how to fix it. But the soft side of change management -- in terms of really engaging people -- is just as important. If people get it intellectually but don't get it emotionally, I don't believe the change will be sustained."

To be engaged, employees must understand the case for change. Managers should provide data showing what's not working and how the change will fix the problem. "Develop your killer slide to make your business case whenever you give a presentation. It's not only why you're changing, but what it's going to look like when you're done. People need to have a sense of what the future looks like, so be very clear on that," MacLeod advised.

Business leaders must own the change agenda and take responsibility for following through on implementing every step in the plan and tracking results to make sure that change continues over time. "Never assume that leaders get it.... We need to take probably 10 times as long in engaging, empowering and educating our leaders than we actually think we do," MacLeod said.

Getting the commitment of leaders is essential to avoid the common pitfall of turning change management into a charade. "You have a workshop, learn some change management jargon, you maybe do some team building, and have a pile of flip charts ... and actually none of the [steps] are properly measured or followed through and it ends up being a waste of time."

It's important also to shift the emphasis of change management from "big splashes" to "everyday performance improvement." You can prevent the typical reversion to old habits by providing tools and training required to continually measure progress toward specific change objectives. "Put written charters and contracts in place. These contracts need to be in people's performance reviews, not something separate," MacLeod said. "You need to constantly look at them and discuss them with people."

Changing the culture to reward the desired behavior is critical to success. Make "heroes of our day-to-day deliverers, not those who make the biggest splash. You reward people on how they treat the customer, how they make decisions, how they simplify the business..... And crucially, all of this has to be done in the spirit of open communication and respect.... If [people are] uncertain and they don't feel respected, the change will never stick," MacLeod said.

Since joining BP in 1988, MacLeod has specialized in business transformation, developing the required breadth of skills in a variety of marketing, HR, supply and distribution roles across the UK and Europe. She has led operational, strategic and marketing elements of the retail business, and most recently led the restructuring of BP's European marketing businesses. A native of Scotland with a Master's degree from Glasgow University, MacLeod was tapped to head the U.S. convenience retail business in 2006, providing her biggest challenge yet: Restructuring the business and transforming the brand for about 1,800 stores from California to Pennsylvania.

MacLeod's project was part of a broader BP reorganization initiative announced in October 2007 to improve the company's efficiency and narrow its performance gap with competitors. When MacLeod embarked on her restructuring program, she had to figure out what was wrong and, more importantly, why three previous initiatives had not worked. She did not want to make the same mistakes.

"The key thing was making our business purpose clear," MacLeod said. "We thought we were there to fill up lots of stand-alone convenience stores and tie up lots of capital, when actually our purpose was to monetize the gas we made at our refineries and make sure we had a secure position in the marketplace for the long term. The question was... how could we put that change in place in a way that would stick."

She chose a bold plan that would require wrenching change. Among BP's 1,800 retail outlets nationwide, 800 were company-owned and operated. She would change the business model to 100% franchised with a revamped ampm store brand and new marketing programs to compete more aggressively.

Selling 800 stores to franchisees would eliminate 10,000 jobs at BP, virtually all of the people employed in BP's convenience retail business. The total included 9,500 store employees and an additional 500 support staff at two headquarters. For the store employees there were no guarantees they would be hired by the new franchise owners. MacLeod and her team faced significant people management hurdles in readying the stores for the conversion process in only 18 months. She would have to motivate store employees to reduce overhead and improve operations, even though they faced "huge uncertainty" about future employment. "Our people were displaying the classic signs of change fatigue.... People were very jaded" and lacked confidence that they could make things better, she said.

"Confidence is absolutely crucial in making change stick. If people are confident in their leadership, themselves and the business purpose, you are way more likely to get a change that is sustainable and actually turns into continuous improvement," MacLeod noted. To build confidence, her team drafted a business case and showed it to the "biggest cynics" in the organization, asking them for a critique and to suggest how to make it work. MacLeod said she built trust by speaking directly to store employees, explaining how the plan would help them beat the competition, and showing that "we had genuine empathy for what they were going through."

So that employees would know what was expected and see their progress, her team communicated month-by-by month performance objectives, including specific plans to reduce overhead costs. "We focused every single day on engaging our people," using town hall meetings, small team meetings and the web to promote continuous improvement, MacLeod said. To prevent backsliding, she offered employees retention bonuses that would be paid at the time the store was sold to the franchisees if the stores were delivered to their new owners with strong financial controls and safety records. "People were very motivated to make sure the business continued to run in a very healthy way."

Celebrating success, recognizing achievement and making people feel good about the business were important tools for sustaining momentum. "People got rewarded for simplifying and improving things. Importantly, it's as much -- if not more -- about the recognition of your peers than it is about financial rewards," MacLeod said.

Know Your Destination

Organizational design helped to lay the foundation for change. "I put my winning, end-state organization in place from day one" rather than waiting to decide which employees would stay to support the franchises and which would leave," MacLeod stated. "We had people who knew they would be leaving in 18 months and they stayed motivated for the entire period because we had been very straight with them. People want and expect clarity from their leaders." Planning was critical to reduce risk as the team rolled out new concepts. "We did lots of road mapping and tested our plans before we went to market," MacLeod said.

In the end, tracking measures showed that employees improved and simplified operations throughout the conversion period, producing $700 million a year in cost savings. Selling the stores freed $1.2 billion in capital for BP to redeploy more productively. Pulse surveys showed morale steadily improved, even though 70% of those responding knew they would lose their jobs, according to McLeod. "The thing I'm most proud of is how our people responded.... You can do some really tough things as leaders and you can do them in a way that people feel valued and respected."

She noted that "it's very easy to get addicted to the change pattern by not getting the change right in the first place, not making the tough calls or bold decisions up-front, maybe going for something half-way, and then allowing things to slip back."

Ultimately, MacLeod said, not just corporations, but the global economy depends on leaders to break the cycle. "The economy needs businesses that are clear on why they exist, clear on what their business model is, and have measures in place to know when they need to make adjustments. We need organizations that can manage continuous improvement in a predictable way."

Thanks to Wharton for this article.

Happy 4th of July America

May all of you have a great 4th of July weekend & happy birthday America

Towers, Perrin & Watson Wyatt Merger

Recently it was noted that Towers Perrin & Watson Wyatt will merge into a new organization called Towers Watson & Company in an all stock deal valued at $3.5B. What will this do to the pricing of services that you may currently have with one of these companies? My thought is that with one (1) fewer choice for HR consultantancy out there that you will see the price of services increase by at least 10%. What will that do to your budget.

Better start shopping around for new vendors.

Jack Welch Says HR Managers Have the Most Important Job in America

Jack Welch, former CEO of General Electric, believes that HR managers have the most important job in America and that CEOs should value their HR managers as much as their chief financial officers. Welch was the opening session keynote speaker at the Society for Human Resource Management's (SHRM) 61 st Annual Conference and Exposition in New Orleans.

In a twist on the traditional keynote speech, Welch took questions from moderator Claire Shipman, author and national correspondent for ABC News' “Good Morning America,” as well as questions from SHRM members sent via video and Twitter. Not surprisingly, the discussion focused on Welch's views on how HR managers can succeed during the current economic downturn.

Trust. First, Welch told attendees that HR managers must earn the trust of employees. They need to take care of those who do a good job, and “tell it straight” to those who are not performing well.

He believes strongly in rigorous evaluations, noting that no employee should wonder where he or she stands in the company. Weak performers should be “traded out of the team.” Welch explained that this does not necessarily mean they should be fired. Often a weak performer will be a better fit in a different position in the organization.

HR also needs to create an atmosphere of growth and excitement, to make the organization “vibrate so people feel the excitement of tomorrow instead of the pain of today.” Welch urged HR professionals to make their companies more informal, less bureaucratic. In Welch's view, this will help organizations retain their best performers when the economy recovers.

Don't be a victim. Welch advised attendees to stop being victims. To enthusiastic applause, Welch exhorted attendees to make it know to upper management that HR makes a difference and to get out of the “picnic, birthday, and insurance form business.”

When asked how HR professionals can make their CEOs recognize their value to the company, Welch responded with two words: by over delivering. Welch explained that HR professionals have to make their bosses smarter by giving them more than what they ask for. HR also has to insist on having a voice within upper management.

Communicate. Welch finally stated that HR has to engage in reality-based communication. Recognize the uncertainties in the economy, and let employees know what is going on. He believes that HR can gain the trust of employees and of upper management through honest, consistent communication and by sending the same message to employees, upper management and the media.

I could not agree with Jack Welch more, he is spot on as to the value and importance of HR. Do you make the grade to meet Jack's level of competence and value to your organization?