A confluence of new capabilities is creating an innovative, more precise approach to performance improvement. New approaches include advanced analytics, refined sales competency and behavioral models, adaptive learning, and multiple forms of technology enablement. In a prior post (The Myth of the Ideal Sales Profile) we explored an emerging new paradigm that is disrupting traditional thinking with respect to best practices: the world according to YOU.
However, with only 17% of sales organizations leveraging sales talent analytics (TDWI Research), it seems that most CSOâs and their HR business partners are gambling â using intuition as the basis for making substantial investments in sales development initiatives. If the gamble doesnât pay off, then the investment is wasted.
Is your sales talent aligned to your companyâs strategy of increasing revenue? According to the Conference Board, 73% of CEOâs say no. This lack of alignment is the main reason why 86% of CSOâs expect to miss their 2015 revenue targets (CSO Insights). The ability to properly align your sales talent to your companyâs business goals is the difference between being in the 86% or the 14%.
What Happens When You Assume?
Historically, sales and Human Resource leaders based sales talent alignment decisions — both development of the existing team and acquisition of future talent — on assumptions and somewhat subjective data.
Common practices include:
- Polling the field to determine the focus for sales training
- Hiring sales talent based largely on the subjective opinion of interviewers
- Defining your âideal seller profileâ based on the guidance of industry pundits
- Making a hiring decision based on the fact that the candidate made Achieverâs Club 3 of the last 5 years at their previous company
- Deploying a sales training program based on what a colleague did at their last company
Aligning sales talent based on any of the above is likely to land your company in the 86% because these approaches fail far more times than they succeed. They fail to consider the many cause-and-effect elements that impact success in your company, in your markets, for your products, and for your customers. As proof of their low success rate, a groundbreaking study by ES Research found that 90% of sales training [development initiatives] had no lasting impact after 120 days. And the news isnât any better when it comes to sales talent acquisition; Accenture reports that the average ramp-up time for new reps is 7-12 months.
Defining YOUR Ideal Seller Profile(s)
So how does your organization begin to apply the ânew wayâ (see illustration below) as an approach to optimize sales performance? It begins with zeroing in on the capabilities of your salespeople that align most closely to the specific goals of your business. In essence, it means understanding what the YOUR ideal seller profiles are.
Applying the new way begins with specific business goals of your company. What if market share growth was the preeminent strategic goal for your organization? Would it not be extremely valuable to understand which sales competencies were most likely to impact that aspect of your corporate strategy? The obvious answer is yes; and the obvious question is how align and optimize sales to drive increased market share?
How does a CSO identify where to target development in order to have the biggest impact on business results?
By using facts as the basis for these substantial investments. Obtaining facts requires several essential ingredients. The first is a rigorous, comprehensive model for sales competencies; that is, a well-defined model of âwhat good looks likeâ for a broad range of sales competencies. This model can be adapted for a specific selling organization, and provides the baseline sales-specific assessments (personality, knowledge, cognitive ability, behavior, etc.).
Then, by applying advanced analytics, including Structural Equations Modeling (SEM) â we can begin to identify cause-effect relationships between specific competencies and the metrics and goals of YOUR organization. With SEM, CSOâs can statistically identify the knowledge and behavior that set top-performers apart from the rest of their team. With this valuable insight, the organization can now align both talent development and acquisition to the companyâs most important business goals.
Sales Talent Analytics Provide Proof
Times have changed. The days of aligning sales talent based on gut feel, assumptions or generally accepted best-practices are over. By leveraging sales talent analytics, todayâs sales leader can apply a proven 3-step approach to stop gambling and get the facts to statistically pinpoint where to focus development of the sales team, quantifiably measure the business impact / ROI of that development, and improve the quality of new hires. But buyer beware; not all analytical approaches are equal. The vast majority leverage correlation-based analytics which can lead to erroneous conclusions.
By the way weâre not eschewing well designed research that provides insights into broader application of best practices. Aberdeen Group found that best-in-class sales teams that leverage data and analytics increased team quota attainment 12.3% YOY (vs. 1% for an average company) and increased average deal size 8% YOY (vs. 0.8%)
Itâs time to define the ideal seller profile for YOUR company. In our next post in this series, we answer the question â how do we capitalize on that understanding to drive the highest impact on our business goals?