Everyone should take the initiative to do what is in the best interests of his or her constituents.  We may not all have the financial security of our seven-figure friend (above), but if there is one thing I have learned over the years is that our action, or lack of action, truly defines us.  If we take the initiative to do the right things in our business and our lives, our reputations will not suffer.  Indeed, they will prosper.  But counterproductive to this fact is that many people in our places of work have succumbed to the “comfort zone.”  You will recognize this in covert or overt tactics for resisting change – “that’s not the way we do it here,” and the like.  General (Ret.) Colin Powell has indicated that this is a quick path to mediocrity.  Building a high performance culture means one must break molds and challenge the status quo, and avoid procrastinating on difficult choices.

TAKES INITIATIVE IN A BUSINESS UNIT – Takes the lead on specific, targeted business issues requiring change even if others do not understand or approve.

Sales force transformation is a big movement these days.  When the economy dipped in 2009, hiring came to a standstill, but companies still needed to know their talent.  This was particularly the case with companies in M&A situations or RIFs.  I am reminded of a client who was director of talent management for the sales division and needed to reorganize the sales team (breaking out hunting and farming roles, etc.).  His superiors felt that assessing the existing sales talent was a waste of money because the incumbents’ managers should be able to shed light on their capabilities.  However, the director stood his ground, telling the executive committee that “we are going to do this.”  The result: A resounding appreciation from the executive committee over the richness of the conversations and appropriateness of the decisions that were made.

Note: This is from a series of Competency Corners in which we have reviewed several of our specific competencies and added a real-world context to them.  For more information about Chally’s competency models and measurement using our talent audit tool, contact us!

Not surprisingly, sales groups often pioneer technologies that later become more widely applied across the corporate landscape.  A prime example of this is “cloud computing.” Computer scientists had been suggesting that computer power could be provided using a public or private utility since 1950s.[1] However, it wasn’t until the early 2000s that Salesforce.com proved that the concept was practical and economical.

Ten years ago, an article in SellingPower magazine entitled “Salesforce of the Future” made the following predictions:

1. The Internet will NOT replace B2B sales professionals. In 2001, most pundits believed that online ordering and industry exchanges would allow companies to sell directly to one another, without a pesky salesrep or margin-gobbling reseller. The article predicted the rise of a hybrid sales model, where the Internet would only become an important component of an overall sales strategy and that companies would gravitate “towards hybrid B2B business models that combine offline and online sales methods.”
2. CRM will extend into the entire marketing and sales cycle. In 2001, most CRM applications addressed individual aspects of selling, like contact management. The article  predicted that future CRM systems will provide salespeople with B2B-type data such as customer visits to the Web site, call-center requests, service escalations, product availability, and the status of customer-specific manufacturing runs.
3. Outside sales would be wireless connected. In 2001, most salespeople carried a cell phone and a laptop, usually synchronizing the data at the beginning and end of each day of each day. Wireless was simply too unreliable for a more real-time system. The      article predicted that within 10 years, everyone – customer and salesperson alike – will be able to connect and retrieve a wealth of information, regardless of where they’re located and that much of that access would come from smartphones and tablets (called “Personal Digital Assistants” in the article.)
4. There will be a wealth of add-on sales tools. In 2001, the latest in sales technology was      pretty much CRM, email, and Powerpoint. The article predicted that ”the wired and wireless Internet will enable companies to offer sales tools that the sales reps of the past could only dream about.” Today, products like Salesforce.com have become both repositories of and channels for various kinds of add-on technology.
5. B2B sales will become more collaborative. In 2001, the archetype of the sales rep was still that of a maverick who closes the big deal and collects the big commission. The article predicted that that would change and that sales reps would increasingly be expected to become experts in their field who can act as consultants, helping customers to understand their needs and then coming up with a plan to fulfill those needs.

Obviously, since the predictions proved largely true, sales executives who read that article were more likely to devise effective strategies over the past ten years than those who assumed that sales techniques and sales technology would either remain static or go in an entirely different direction. For example, sales executive who believed the prediction that a hybrid sales model would emerge naturally prepared for that model by investing in both website and sales training.  The sales executives who lost out were those who continued to believe that “B2B selling means pressing the flesh” (i.e. selling techniques would remain static) or that “B2B selling will be largely replaced by an online marketplace.”

For information on Chally’s on-line Talent Audit, contact us at info@chally.com.

The central premise of Moneyball is that the collected wisdom of baseball insiders (including players, managers, coaches, scouts, and the front office) over the past century is subjective and often flawed. Statistics such as stolen bases, runs batted in, and batting average, typically used to gauge players, are relics of a 19th century view and the statistics that were available at the time. The book, The Art of Winning an Unfair Game, written by Michael Lewis, argues that the front office of the Oakland A’s took advantage of more analytical gauges of player performance to field a team that could compete successfully against richer competitors in Major League Baseball.  Rigorous statistical analysis as outlined in Moneyball had demonstrated that on-base percentage and slugging percentage are better indicators of offensive success, and the A’s became convinced that these qualities were cheaper to obtain on the open market than more historically valued qualities such as speed and contact. These observations often flew in the face of conventional wisdom and the beliefs of many baseball scouts and executives.

By re-evaluating the strategies that produce wins on the field, the 2002 Athletics, with approximately $41 million in salary, were competitive with larger market teams such as the New York Yankees, who spent over $125 million in payroll that same season. Because of the team’s smallers revenues, Oakland is forced to find players undervalued by the market, and their system for finding value in undervalued players has proven itself thus far.

Whether we work for small companies or the world’s largest, we are all faced with economic barriers. Companies must work more creatively and implement the needed tools to help them manage their “people” with the most current and progressive methods. Looking for true behaviors versus personality traits is a good start and utilizing research-based analytics for more accurate talent management, just like selecting baseball players, is a necessity.

For more information about Chally’s research-based talent management solutions for selection, development and succession as well as a talent audit, contact us at info@chally.com. Or for the full white paper on Leveraging Techniques of Moneyball, go to http://chally.com/executive-briefings/.

I was speaking at a succession planning conference for a group of senior HR and Talent Management leaders recently, and I was pleased to see the acceptance of executives of the digital age. I don’t mean to be flippant, but having been an early adopter of these technologies and I have found it fascinating the dichotomy between one’s connectivity at work and one’s connectivity at home. I have also seen it thwart the building of people and organizational capabilities.

While something like 50% of the world’s population is under 30, the cadre of people running most large, global organizations is Baby Boomers. The digital divide has typically meant the gap between those who have access to technology as opposed to those that do not, but at this conference, it was as defined by “those who are using agile mobile platforms in their leadership development strategy and those who are not.” Most corporations have formal social media policies in place, and limit access to personal sites during work hours. There are those exceptions of course where social media by employees is a cornerstone of the employee value proposition as well as the brand, like Zappos.

The conversation about agility mobility was lively when discussing how to close the gap on the necessary skills needed to compete today and in the future. The majority of people in the room are being pulled by the demand of their employees to engage with them in ways that work e.g., getting coaching guides on their smart phones. This is a good thing, and if you do not have a digital strategy in place, now is the time to consider how your competitors will leave you behind.

The Chally Questionnaire does not measure specific digital skills, but the mistake people often make is assuming that how to be a good digital citizen is different than how to be a good corporate citizen. The fact of the matter is, the key to a successful digital strategy requires many of the same skills bricks and mortar or face-to-face demand with one exception—an understanding of the appropriate tool and technology to align with the culture.

Like most things in life, this is simple and not easy to do. When implementing a leadership development program, we advocate our clients embed agility mobility in the design of the deliverables. While this is not Chally’s core skill, we have partners who are cutting-edge in this domain. There are all kinds of research studies that talk about the need for consistent habits over an extended period of time to change behaviors. Given that most of us spend more time connected to our phone than any other possession, what better platform to remind people of those habits than your hand-held device? Give your employees what they want!

For more information about Chally’s Leadership Talent Audit and research-based Predictive Assessments, go to www.chally.com.

When you hear someone described as “nice” it evokes a particular image, but I doubt it tells you much of significance about the person. The same could be said of “high potential” when discussing leadership development.

Don’t get me wrong; there is nothing innately wrong with being nice. Many of our mothers would be proud if this adjective was used in a sentence describing us, and the dictionary definition of “nice” is quite elaborate. However, in conversations the word “nice “is usually ascribed to an individual without much context behind it. The same can be said of “high potential”. What does “high potential” mean to you? I assert it has come to mean everything and simultaneously nothing when describing the talent needed to lead in today’s complex business environment.

It is fascinating to consider this given there are voluminous amounts of research studies across disciplines (including Chally’s) dedicated to understanding what differentiates high performers from the rest of the pack. The issue is not so much about the factors that make one high potential, just like the factors we identify with the nice guy vs. the jerk. Rather, it is the application of these principles in an efficient and systematic approach inside organizations that has lessened its value in understanding who to promote to the next level.

The problem with many high potential models is the competencies, skills, and behaviors and motivations are too broad to provide much detail to be relevant to the execution of the business strategy. Furthermore, large global organizations may need multiple high potential frameworks at the lower levels of leadership based upon geography and line of business, but a consolidated framework at the top of the house to ensure shareholder value is maximized. This makes creating an emerging leader pool difficult without using analytics to know who is right for what role at what level.

The need for targeted development has never been greater due to the speed of business, and the need to accelerate the promotion pathway of leaders to key roles. Chally has observed over time what it takes to create targeted development for high potentials, and leverages our predictive analytics to identify potential along the entire life cycle of the employee. Unlike other assessments which are descriptive and influenced by life events, Chally provides insight into potential and more importantly alignment of that potential by role. The granularity of the 140+ skills, behaviors, competencies and motivations we measure identifies the talent who can succeed in a more senior role than their current role. This level of insight allows for a more practical definition of “high potential” based upon what you are trying to accomplish, and who is best suited to make it happen.

For more information about Chally’s Talent Management Solutions including our Predictive Assessments and Talent Audit, contact us at 800.254.5995.

Who will be gone? Salespeople who don’t personally add substantial value themselves! The evidence is all around us. Online auctions have replaced many high dollar salespeople in major commodities such as folding cartons, office products, paper, etc. More and more hi-tech and high dollar sales functions are being outsourced to specialized “telesales” organizations. There are major organizations and associations supporting sales outsourcing organizations. Many manufacturers depend on a variety of Channels that do not require a direct sales force. According to Sales Partnerships, “Total sales in the global sales outsourcing industry currently exceed $10B (US)/year and are projecting to exceed $100B (US) within the next five years.” The internet itself is sufficient to satisfy the needs of sophisticated customers who are expert on their company’s needs, the specifications of the products they need and are armed with in-depth data on the vendors they are considering … without a single face-to-face contact with the vendor’s sales force. It’s time to move on. The salesperson techniques that evolved over the past century could be referred to as old school or “Sales 1.0“. New technologies, sales analytics and more customer-centered sales strategies have replaced the techniques of Willie Loman, the “Tin Men” and the other aggressive sales types that have stained the public’s image of sales since the industrial revolution.

New Tools for a “Science of Sales”

New entrepreneurs have developed a cornucopia of hi-tech sales tools that can drive Sales Analytics to better manage the sales process and help in every stage of a managed sales funnel. Salesforce.com has grown to over a billion dollars in revenue. The major consulting firms including top rated McKinsey and Bain and Company, have developed substantial practices in sales performance effectiveness.
New case studies are being published to demonstrate the value we should expect to see.

Where’s the Beef (Sales 2.0)?

The results haven’t exactly lived up to the expectation. The “C” suite still doesn’t put much stock in a sales projection, not to mention inviting sales to a seat at the strategic table. The hesitancy seems justified. CSO Insights survey reveals that some 1,800 sales forces report that over 41% of all reps didn’t achieve their quotas. As a result their company’s overall achievement fell short of their plan by more than 16% … and that was a drop from the previous year. With all these new electronic and internet tools, what’s missing? Why are so many salespeople still struggling?

The challenge we must overcome is a need to focus on the most important element of all: the talent, skills and competence of the salesPERSON.

If you play golf, are passionate, committed, hardworking and play a lot… Sadly, you’ll likely never be Tiger Woods or even an average club professional. You don’t have the talent or training needed today and you don’t have the experience and knowledge, even if you had the talent.  Today’s sales force needs to move beyond “solution selling” and good management tools to the standards of a profession. Beyond “Closing” to becoming a trusted advisor! In other words, beyond amateur status to Professional.. Enters Sales 3.0.

Professional status in any field, Medicine, Law, Engineering, all have 3 basic requirements:
First: a minimal or base level of competence and knowledge common to all types of roles in the field. In sales, for example, this requires a high level of comfort speaking the language of customers. In business-to-business sales is a financial language P&Ls and Balance Sheets.
Second: some type of certification to substantiate that those base requirements have been met…and
Third: recognition that in a profession, advanced individuals must move beyond the general requirements to specialized skills. We wouldn’t ask a pediatrician to perform heart surgery, or a chemical engineer to design a bridge.
Professions also have and continue to grow an established body of research. It is the underlying science and the disciplines that science develops and documents that separates the amateur from the professional.
That person on your right ‑ does he have the “professional stuff” or will he be outta here?

What to know more about how Chally can provide tools such as predictive assessments and talent audit to help move your sales force to Sales 3.0 – Professional or World Class status?  Download our Sales Transformation Roadmap white paper. http://chally.com/executive-briefings/

At Chally our research has concluded that broad traits measured by instruments such as Big-5 personality, the 16PF or Myers Briggs are useful for general self-awareness, team-building activities and leader development. But broad characteristics like Extroversion and Ambition tell us surprisingly little about whether the person will excel at performing his or her job. It is more specific facets of behaviors that actually predict the outcomes that are truly important in employee selection and development efforts – hiring the right person for the job and developing the right things in that person so he or she continues to be successful.

We have all run into the stereotypical salesperson who talks incessantly and refuses to take “no” for an answer – the image of a larger-than-life man smoking a cigar and slapping someone on the back while closing a deal comes to my mind. But in reality, this over-the-top behavior only results in closing deals in television and movies. And simply being an Extrovert and talking ignores the one thing that makes most salespeople effective – listening to their customer instead of talking to them.

In the 1992 movie Glengarry Glenn Ross, Alec Baldwin’s character (Blake) professes to others the ABCs of sales “A-Always, B-Be, C-Closing.  Always be closing!” What is closing? It is the art of sealing a deal. And much like the myth that the best salesperson is the best sales manager, a good salesperson who sells auto-parts cannot necessarily be a good systems salesperson in a territory. Thus, the types of skills necessary to close actually differ considerably. A single competency for closing is, therefore, much too broad to predict outcomes (just as Extroversion is too broad). Chally has identified five different types of closing, and two examples are presented below. CLOSES THROUGH EMOTIONAL APPEAL – Building a prospect’s enthusiasm to the point they are fearful of missing the unique benefits if they fail to act.The idea of a car salesman comes to mind here. Recently, I took my car in for service and was approached by one of these guys who told me I should get out of my 2004 car and into a new one because they had the deal of a lifetime and if I did not take advantage of it then I would be crazy. “We will never offer this again, and you could pay 10% less than dealer inventory!” He almost got me, too. If it hadn’t been for his failure in being supportive and cooperative (another Chally competency) then I might be driving a new ride today. CLOSES THROUGH LOGICAL, INCREMENTAL STEPS – Breaks the sales cycle into increments and gains commitment to each component leading up to closing the sale.

I was on a sales call some years ago with a fellow who was the master of closing. We had a confirmed appointment with a sizeable pharmaceutical company for a major salesperson selection project, and John was the lead in the sales effort. He went in, asked probing questions, understood their needs and then began to educate the client, not sell them. John went on to describe the benefits of using our service and made sure that everyone in the room understood how the system was going to solve problems. In hindsight, I understand that he was slowly gaining the client’s commitment to us, the products and services we offered, and how it would fit into their needs. In the end, the client began telling us why they needed to use our system. Now that’s selling without selling.  Dr. Killian currently serves as Senior Technical Consultant at Chally. If you have any real-life examples of how Chally competencies have played out in your careers or observations and would like to share them, please email your story to him at jameskillian@chally.com.

One of the favorite “Consultants” solutions to building sales force productivity goes like this: Study and identify the techniques of your “A” players, your superstars (the top 20%). Then, train the rest to use these winning techniques. They typically offer case studies and examples. So let’s test this sales myth with a little common sense and basic sales math.

Our test dummy here is a very typical 200 person sales force for a company (ABC Company, of course) that has annual sales of $200 Million (let’s keep it simple, my math isn’t that great) If we plot the normal bell shaped curve the basis for the famous “80/20 rule” cited so frequently to describe typical sales force productivity, it would look like this:

Myth one: However, contrary to the popular 80/20 expression the top 20% of our sales force does not deliver 80% of all sales …but 52% is still pretty good. So let’s study the techniques of the top 20% and train the middle 60%. And let’s assume we could get an aggressive 5% improvement from training. What growth can we expect? The Result:

Improving the performance of the middle 60% by an aggressive 5% each can only produce a 2.25% improvement in sales. It’s likely that the Superstar benchmarking research and training cost at least several hundred thousand dollars. Myth Two Conclusion: This myth’s hardly worth it!

Be Merciful: LOSE THE LOSERS. So what would the smart money do to grow sales? The people who make it to the “c” suite (and succeed there)?
They’d apply Total Quality Management (TQM) principles (I.e. focusing on finding and eliminating the sources of sales failure, the basis for six sigma, ISO and “Lean” productivity improvements). They’d focus on the real problem with this sales force - The bottom 20%! Those who are losing all the money!

Reassigning or replacing the bottom 20% with just “average” sales people will increase production by a minimum of 9%. If you now train the rest of the sales force and get a 5% gain, you get an additional $5.7 Million.

By the way, for those sales managers who would rightly be concerned that we can’t leave that many territories open by firing all of the bottom salespeople, take heart: The global statistics indicate that on average, half of all the bottom 20 percenters leave their organizations voluntarily every year. They realize this job is worse for them than the company does.

The Bottom Line

Replacing the Myth with real math, common sense and a little Total Quality Management thrown in costs less and grows productivity by 19.3 million more. In fact applying TQM to sales or TQSalesM^TM as a continuing “process: produces even more dramatic results

MYTH Shattered!

Start your TQTalentM process by performing a Talent Audit, which will give you an inventory of all competency strengths and development opportunities.

Principle 1: Repeat sales from existing loyal customers offer significantly more volume and profit.

Raising customer retention rates by only 5% increases sales by 25-85%. The Harvard Business Review reported data from a variety of industries as early as 1990¹. The sales increase rates for several market segments include:

1. Software 35%
2. Industrial distribution 45%
3. Credit cards 75%
4. Advertising 95%

The message is clear—building customer loyalty is dramatically more critical than many other business priorities. Yet, customer satisfaction and the resulting customer loyalty are not the principal sales or marketing priorities for most businesses. Executives feel there are no precise or accurate metrics to track customer loyalty in real time. Instead, executives in the business-to-business market are more likely to focus on new products, acquisitions, and special advertising or incentives programs to build sales. These approaches are considerably easier to track, but they are more expensive.

Some innovative and aggressive companies, however, are currently using “customer audit” data to track precise changes at the individual customer and salesperson level … in real time. Chally interviews business-to-business decision-makers at all levels of responsibility and documents over 100,000 competitive ratings of US and international sales forces every year.

Principle 2: 95% of business buyers are not loyal to their present supplier.

Research on customer satisfaction indicates that 80% of all vendor deserters rated their previous vendor as “good” to “very good.” However, customers who rated their vendor as “very good to excellent” were 42% more likely to remain loyal². On most customer-driven rating evaluations, a “very good to excellent” rating would require a score of 90% or better, rarely accomplished in business-to-business sales.

Ongoing research conducted and first reported by Chally in an issue of Selling Power verifies that less than 5% of all major sales forces were rated as very good or better and viewed by customers as effective enough to maintain customer loyalty. Applying typical Total Quality Management (TQM) techniques to sales is likely to be the next major competitive challenge. Now that so many sellers face competitors who can offer essentially the same products, features, service packages, and even price, the point of competition will often become the added values the salesperson can bring to the table.

¹HBR / ²HBR 

Principle 3: World Class sales and service performance now depends on selecting and refocusing the 21^st century salesperson.

The primary role of the business-to-business or high value added consumer salesperson has evolved. In the past, salespeople were usually responsible for day-to-day purchases, administrative management, technical support, and customer service. Today’s salesperson must also be a “customer business consultant.” In this new role as consultant, salespeople must learn and understand their customers’ businesses, elevate their relationship beyond the traditional purchasing, technical, and administrative function, and add value to the customers’ business results.

To support this broader consultant role, additional specialized sales support roles are emerging rapidly (i.e., technical support, logistics, project management). The goal is to focus the salesperson on the customers’ business needs and use other roles to support this relationship.

As price continues to diminish as the major criteria for selecting a vendor, it becomes increasingly more important to employ a sales force willing and able to meet the changing needs of customers and to provide the added value needed to sustain their loyalty.

Chally’s joint research with the Strategic Account Management Association (SAMA) has statistically validated the critical “consultive skills” that distinguish top performers from less effective salespeople. Our national/ strategic account profile is 85+% accurate in identifying high potential candidates throught our predictive assessments and talent audit.

So to attract new business most marketers believe we have to be able to prove it. A three year P & L accounting of a customer’s return on their investment in this wonderful product or service could do the trick…

Except they’re expensive and difficult if not impossible to track, and too boring, and too complex for most to read.  Let’s face it, even if we could get them, P & Ls are not “sexy” enough to attract attention in the market clutter of claims, clamor and clever hype!We need pictures, graphics (charts and bar graphs are great) and human interest. The Ideal solution: the Case Study. If the headline is compelling, and the story plausible it will be accepted as real. There are so many (everybody has them) that they are accepted at face value. The fact that the GREAT majority is trivial, irrelevant or actually misrepresentations gets forgotten.The problem:
Most don’t pass the legitimate “smell test” of a truly analytic or statistical analysis.

The most obvious flaws:

1. Even terrible products or services are liable to work sometimes and with some customers, so let’s pick the best of these and present them as typical!

2. Most case studies typically fail to exceed the now well recognized “placebo effect” the short term benefit that can produce 20-60% improvements just from the customer believing this solution is logical and bound to work. This is especially true when the “sample or example” is small scale (less than several thousand), and the tracking lasts for only a short period of time (less than 2-3 years). By the way, how many case studies have you seen reporting results across multiple customers and over long periods of time?

Seth Godinmay have put it best: “We don’t like to admit that we tell stories, that we’re in the placebo business… Of course, we need to persuade ourselves that it’s morally and ethically and financially okay to participate in something as immeasurable as the placebo effect. The effect is controversial and it goes largely unspoken. “Sadly this manipulation and misrepresentation, has gotten so acceptable and pervasive there is even a company: Mega Placebos Plus ™, that promises to bring the “awesome power of placebos to you in dozens of new ways.” They claim “Absolutely nothing works as well as the multi-purpose placebos and placebo services we offer”. They guarantee it. Because “every product from Mega Placebos Plus ™ is so easy to use–there’s really nothing to it! And there’s nothing to worry about!”

3. Statistical word games are also big. For example, in one of our core businesses, assessing individuals to identify the best candidates for hire and the best areas for development for incumbents, the proof of effectiveness is accuracy in predicting the level of future performance of the candidate or incumbent. The statistical measure is a “validity study” or predictive analytics that confirm that higher assessment scores predict better performance. However, many competitors substitute reliability of their assessment (which simply says that an individual who takes the test twice will get the same score. i.e. if he gets a good score but fails to perform…the next time he will likely get a high score again (and probably fail to perform again.)

The second trick, typical with personality tests, type indicators, and style tests is to show the validity scores for the assessment measuring what its scales are labeled instead of future performance. In selection we really shouldn’t care if a candidate is extroverted we should only care if he/she will succeed in the job regardless if he/she is extroverted or not. Why? Because the real research has demonstrated that even in sales many of the best salespeople are extroverted…and many are not!

Bottom line: “Lies…damn lies…and statistics” (if you don’t understand the statistical tricks) is True and we haven’t even talked about the marketing tools of “operant conditioning”or the more controversial persuasion techniques.