Applying TQM Techniques to Sales
Putting the right salespeople in the right sales jobs using measurable, predictable, and actionable productivity analytics technology.
Six Sigma, the data-driven methodology commonly used to eliminate defects based on standards, measurements, and repeatable systems and processes, has provided undeniable cost reductions for organizations around the world by eliminating waste and improving productivity. So why hasn’t this TQM (Total Quality Management) concept of measurable and predictable error reduction been applied to Sales Force Management? TQM requires a system of precise measures objective and accurate enough for statistical analysis. By contrast, the measurement of sales force performance typically involves subjective and overly general data that proves to be too fallible to support the level of accuracy that TQM requires.
TQM Even Helped Hollywood
Imagine using the 80/20 rule as it now applies, to the Hollywood mantra of hit-driven economics: the top 20% of films will make virtually all the profit, subsidizing the loss-making bottom 80%.
In other words, if you could know ahead of time which films would be hits, the economically rational decision would be to make just 20% as many of them. And, indeed, this is largely what movie rental and download companies do. Since they do know which films were hits in the box office, they mainly stock and push just those. As a result, theatrical hits from the past year make up 90% of the transactions.
A measurable and quantifiable Six Sigma-like process has been defined and documented to help address these error-prone, human aspects of sales management.
The initial requirement is an accurate measure of any individual’s skills, competencies, motivational drivers, work habits, and potential for developing future competencies. The assessment technology must be criterion validated to be predicatively accurate. It must provide the actuarial data and analysis of sales success and failure, and identify productivity improvements and/or reduction in “unwanted” turnover well beyond the 25-65% accuracy most commonly reported. Research suggests that only a Six Sigma or TQM approach can accomplish the necessary level of quality improvement in the management of intellectual capital. Using a TQM for sales or Total Quality Sales Management (TQSalesM) requires focusing primarily on identifying the “causes of failure” of otherwise qualified sales and service people. This is a counter opposite approach to the more common identification of the criteria for success as typically seen in job analyses and competency studies. A TQSalesM approach is capable of establishing a single process that can measure all of the relevant competencies with an accuracy level robust enough to support substantial quality gains in the management of a company’s most valuable “Human” assets.
The result is a TQM Sales Talent Audit system– an information repository where organizations have a complete inventory of strengths and weaknesses for all employees in every key position. This relational database can distinguish the job performance potentials for key talent located anywhere in the organization.
The causes of failed Talent Management Systems are many. An effective Six Sigma and TQSalesM approach can dramatically reduce most of these causes and help maximize the most common measures for sales force effectiveness:
- Increasing sales goals
- Achieving sales goals
- Reducing unwanted turnover
- Motivating top performers
- Putting the right sales in the right sales job
- Maximizing your training investment