Interpersonal Business

Vol. XXXV

Dear Manager,

All companies seem to address these issues from different perspectives. Some set no objectives, some set forecasts based on insufficient data, and some take their forecasts dogmatically. Others find the balance, maintain very real expectations, and find them to be productive. But please….

GIVE ME QUALITY NUMBERS

How can any manager possibly manage with ineffective or inconsistent expectations? Under these circumstances, companies seem to reward those who fail and reprimand those who succeed. Amazingly, many companies look at their sales figures and daily sales bookings in a similar light.

In this scenario, a company’s focus is formulated and translated through their financial department. Accounts receivable and payable make the rules. Shipments, not sales, reign for these companies, because of its relationship to the bottom line. Daily sales sheets and historical comparisons are nowhere to be found!

The analysis of receivables, payables and shipments have no direct relationship to current sales. Sales drive all aspects of an organization, while shipments are a support function. As an indicator of success, shipments are old news. How can a company get an accurate picture of current business by living two to four weeks in the past? How can sales management possibly be asked to be accountable for information so dated in nature, unless the intent is to provide them with a safe haven in which to hide?

The number of companies who rely on this dated information is nothing short of perplexing. From a pure sales perspective, how does the factory know if I exceeded my previous year’s sales or not? If shipments will determine my success or failure, I will need to monitor both their purchasing and shipping departments to maintain an accurate evaluation of their/my performance. This is what I am now being held accountable for! I wonder how many sales people from these companies were terminated due to their perceived lack of performance during a UPS strike?!?

I SUPPOSE ONE ALTERNATIVE IS NO DIRECTION AT ALL

While accuracy is critical for managers, forecasts are intended to establish patterns, and form comparisons for their sales people. How is this possible if no forecasts are given? I know of many manufacturers and sales agencies that do not even provide forecasts for their sales people. Once again, this is an example of management living in the past. Should problems arise, management and their sales people are often caught flat-footed and in no position to respond. By then it can be too late. Sales management, in contrast to the big game hunter, gains no benefit from the element of surprise.

When a solid foundation is established, the greatest benefit of forecasts for all companies is the ability to bring focus. Quality numbers simply don’t lie. There is no refuting the best of the best and the worst of the worst. There is no one quicker and more capable of defending (and even finding the bright side of) poor performance than a good salesman. This is why they are in sales. There is no one better at destroying your position than a sales person who is asked to be accountable for expectations that reflect inaccuracies in your system. Quality information is a manager’s only salvation!

THREE DISCIPLINES OF FORECASTING

1. Develop objectives: This can be done weeks prior to the end of the year. Meet with your associates to gain a feel for the marketplace. Determine their objectives, and what they feel are reasonable expectations for their presentations. Share your thoughts and responsibilities with them individually, or as a group.

Always remember the following premise: Manufacturers anticipate growth. This is why we, as sales people, have been asked to represent their products. Sales people should expect quality products and presentations. This is why they have chosen to represent your products in anticipation of meeting mutual expectations.

While equal in foundation, these two perspectives are seldom considered simultaneously. Factories will rarely admit to poor performance in the marketplace, while continuing to expect (hope for) continued sales growth from the field. Sales people will rarely acknowledge excellent performance in the marketplace while trying to defend their failure to meet their objective. Obviously it becomes a dance. Somewhere between these valid considerations lies a reasonable and attainable objective.

2. Review your objective: All too often for sales management the process stops after step one. A monthly and quarterly review is essential to maintain performance.

Forecasts are similar to the grades we received in high school. We cannot argue that a D is acceptable if everyone else in the class is getting an A. Neither can you suggest that an A is expected if every one else is getting a D. If the majority of your regions are exceeding their objectives, those who have failed to do so will need to re-evaluate their own performance. The standards of a quality forecast are always defined by one’s peers. If the majority of your regions have failed to meet their objectives, there is certainly no value in terminating the entire sales force. In this instance, the original system of forecasting is flawed. It is now time to evaluate all aspects of your own presentation.

3. Recognize your objectives: With each step after number one, management seems to take less involvement in fulfilling these basic objectives. Recognition is a very powerful and rewarding tool for all parties. Studies have shown that, as a source of fulfillment and satisfaction, personal recognition often equals monetary compensation!

Personal recognition assumes a very low profile. No one will negotiate for personal recognition in their time of review. Personal recognition is the silent victory we all feel when we have been singled out. Having been recognized, we know, and everyone else knows, just how good we are. There may not be any greater personal victory in life.

I have always believed in monthly recognition for the top achievers in my company. Quarterly or semi-annual awards are as much fun to give as they are to receive. A final award of Sales Associate of the Year always enjoys great anticipation as the highest recognition for a job well done. As managers, never allow this opportunity to slip through your fingers!

Forecasts will also provide you with a foundation in the event that a change of course is required. There is no benefit in retaining individuals who have consistently exhibited a lack of performance. There comes a time when it is a disservice to all parties to continue. With months of review at your fingertips, comparative analysis, and conversations that have taken place, there can be no misunderstandings. As a manager, you have a responsibility to yourself, and to the entire organization, to consider a change.

Forecasting can and should be motivating, challenging and, most of all, rewarding. Individuals who only live by the numbers will die by the numbers. Individuals who take inspiration from this process will treat it like a challenge, and be rewarded greatly for their efforts. We can accept the process and flourish, or deny the process and place our fate in someone else’s hands.

I am reminded of a favorite quote from Dave Leland, a Portland businessman, which seems to have obvious applications in meeting the realities we must all face. “It’s really easy to spend a lot of time solving the wrong problem.”

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2009. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM