Deming-Focused Scientific Sales Operations

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by Ryan D. Bretsch

‘It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.”                  — Sherlock Holmes

APPYLING DEMING-BASED PRINCIPLES TO SALES OPERATIONS

What is an Sales OPDSA Planning Process?

The derivative Sales OPDSA is a variation of a W. Edwards Deming designed management methodology (PDSA) used to ensure quality in the planning and decision-making process. It is particularly focused on providing continuity, direction, alignment and organization when designing and planning the improvement of sales operations processes. OPDSA is a universally validated, scientific method/approach to business process design because it applies a disciplined, systematic and rigored approach to solving complex sales operations issues.

In a business world where “3 Easy Ways to Increase Sales” or “How to Do $10M in Sales on Shoestring Budget” is the new normal, the concept of planning and applying the proper resources to business execution may seem almost old-fashioned.  Interestingly enough, however, the difference between the 80% of new businesses that fail and the 20% that succeed is oftentimes having a well-defined plan and getting clean execution on it versus the fashionable but dangerous mantra of “just do it”.   That works for Nike, but guess what?  It is not a practical application for accomplishing standard business objectives.

So let’s talk about effective planning.   And let’s talk about applying Deming to the sales operations world.

The components of the Sales OPCSA (a derivative of the Deming PDSA cycle) are as follows:

 

OBSERVATION

In Deming Circles, observation is ascribed to “grasp the current condition”.   In other words, this means taking the time to record the state of affairs in sales operations as it exists currently.   Observation incorporates working to understand and document any inefficiencies and challenges presented by the current method of accomplishing work/selling goals. Determine what needs to be measured and reviewed.

 

 PLAN

Before we even begin talking about planning, I want to emphasize an important note:  The executive team must be “aligned” to pursue planning objectives.  Don’t assume “alignment” exists.  It is one of the largest mistakes an executive team can make for gaining swift business execution further down the road.  Test for it.  Planning involves identifying and establishing the objectives and processes necessary to deliver sales results in accordance with the expected sales targets and goals.

  1.  Analyze the previously observed “current situation” by reviewing all associated data.  Identify both positive and negative  outcomes along with their associated causes.  Rank their importance and set priorities for action.
  2.  Define the criteria for measuring data (key performance measurements) related to the sales operation; in advance of  further assessment.
  3.  Establish specific objectives and successful “outcomes” for what needs to be accomplished.
  4.  Create the plan. Document an ordered process for taking action, with specific agreements and responsibilities defined, agreed upon and then assigned.
  5.  Document and resolve, through planning, any expected barriers to implementation.
  6.  Document the concrete steps needed for execution, with the associated timeline for accomplishing specific objectives.
  7. Common tools to use in the PLAN stage for analyzing data inputs are Histograms, Correlation Analysis, Pareto Charts and Cause/Effect Diagramming. 

 

DO

Implementation phase. Execute the agreed upon sales operations process/plan. Responsibility for execution and resultant accountability rests solely where it has been previously assigned. There should be no overlap or interference of responsibility, engagement or assignment. Collect data for documentation — to provide further analysis for the next steps.

 

STUDY (CHECK)

Study the actual results of implementation and the manner in which the plan was executed. Verify that the execution phase was carried out on schedule and executive staff completed all assigned responsibilities. Compare the “actual” results of execution against “expected” results to ascertain what the differences are and why they occurred. Review to ensure the plan was realistic to implement by listing actual barriers to implementation.   Finally, look at deviation in the execution of plan by assigned responsibility and determine reasons for deviation. Assess to ensure any deviation from the agreed upon plan was for valid reasons.

 

ADJUST (ACT)

Adjust the plan as needed, to reconcile the difference between the new current state and the desired state, as previously outlined in the planning objectives.  Request corrective actions on significant differences between actual and planned results. Analyze relevant differences to determine their root causes.  Determine where to apply changes which will improve the process.  Implement these changes.

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Sales as a Difficult Endeavor… Part I

It’s quite fascinating that I can describe, in detail, the process for learning how to swim in a pool.  But that doesn’t mean that the act of swimming can be readily accomplished. Knowing how to swim is a skill that transcends simple instruction.  The same holds true for implementing the dictates of business writings– especially around the topic of sales and sales management.

Sales Management is a complex endeavor akin to building a fine mechanical timepiece.   Each piece must work in precision with the other parts to keep functional time.  The more progressive the individual parts work in synchronization, the more precision the timepiece has.  And when the individual parts don’t work in sync, then the entire timepiece is no longer functional.  When thinking about sales management as individual parts to build a collective whole, close to 100% alignment is critical to constructing a successfully executing sales operation.

So what are some of the parts of the sales management timepiece that need to be built and managed with such care & precision?  Many of these topics could become entire articles in and of themselves… but we’ll briefly touch on these as just an overview.

1.   A company has to get very clear on what their value proposition is and ensure that every person on the sales team (and actually everyone within your entire organization) understands the value proposition and knows how to articulate it properly.  Your entire sales platform rests on what your product or service can solve for your potential customer.

It’s that important.

2.   The sales compensation plan must properly motivate sales representatives to align their selling interests with the company’s business interests.  It also must properly reward the right performance with the correct amount of attainable compensation to make the sales position stable yet attractively rewarding.  Top sales reps always gravitate to companies with great compensation programs.

The ability to attract outperforming sales reps = ability to obtain outperforming top line revenue or GP growth.

3.  There must be alignment of purpose between your marketing, sales and customer efforts.  Although there are cases in which marketing can play a predominant leading role in generating earnings (such as Apple, for example) most companies are not Apple and require a strong sales effort to take the lead in generating revenue or GP.  Typically, the marketing function should provide a level of lead generation for sales execution.  The sales function then qualifies and converts leads into customers and revenue.  Customer satisfaction preserves the income stream and provides a base for expanding revenue.

The roles within each of these functions should be clear, with a defined process of how each function objectively integrates with the others within the organization.  This is key for proper sales execution.

4.  People Leadership:   The right sales leadership sets the tone for everything else which follows.  A great frontline leader requires a sales manager who knows how to set the proper expectations with staff from the onset, with clarity.  He or she needs to know how to develop underperforming team members though the ability to teach all elements of the “sales cycle”… and do so in a manner that builds trust.   Yet the sales leader must also possess the dual ability to provide “perspective” to outperforming team members who do not need as much in terms of sales coaching.  And a well-seasoned sales leader knows the difference between the two.

The careful & thoughtful sales leader considers all factors when evaluating individual performance and can consistently steer individual team members to ever higher sales accomplishment through resource support, training, motivation and focused development.

 ———

In Part II, we will look at hiring profiles and elements of building an effective sales process, including the construction of effective sales campaigns.  We will also touch on the proper use of sales tools and support systems as well as creating and analyzing KPI measurements.

In Part III, we will review incorporating sales training into the organization, building effective sales incentive programs, territory management and the role of negotiation in helping to build bridges to organizational alignment.   We will close by providing example “thought chains” to consider how and why all of these elements must work in sync with each other.

A Sales Blog Like No Other?

I have been encouraged to start a blog by a number of people over the course of time, but a recent conversation inspired me to move on the idea for real.  I reside in Seattle, Washington and even though I am a fairly recent transplant here, it definitely feels like home.

I have lived in a number of places– St. Louis, Portland, ME and Tampa, FL to name a few. Everywhere that I have been, the one universal business truth that I have seen is that the sales function has always had a central role in business planning.

I have found the experience in Seattle to be different.  There are a lot of startup companies  in the ebb and flow of the Seattle economy.  The exciting thing about that is that it really is a glimpse into the workplace future, due to all of the amazing creativity.  That said, as we all know, the failure rate for startups is high.  Scott Shane, in an article in “Small Business Trends” has researched a quantitative number that trends as high as 45-50% over just a five year period.

One observation that I have made is that many small business startups rely heavily on the product/service innovation itself to lead the way of their sales efforts.   Sometimes they will bring a marketing emphasis into the equation.   But in my discussion around how the sales effort is being led, I have repeatedly been asked things like “What are three easy ways to jumpstart sales?” or “What are six or seven quick selling methods that I can use to guarantee my product’s sales success?”   I am essentially being asking for the “magical elixir” to plan their sales effort.   And much like the real concept of “magic”, this can often be a delusional bag of tricks that conjures up nothing but difficulty and struggle in the absence of formal sales planning.

My answer to them, and I’m sure this will resonate with many an experienced sales management professional, is that the concept of sales management is much harder than it appears.

That precept will lead to my first topical blog post, “Sales As The Difficult Endeavor…”