How to Give Performance Reviews: A 3-Step Action Plan

Survive Performance Reviews

You know they’re important. HR is on your case about getting them done. But, they’re time consuming, uncomfortable, and disorganized. And as a manager, you have more important things to focus on right now.

We’re talking about the dreaded performance review.

They’re among the most underused levers for affecting behavior in most organizations. Reviews encourage people to play by the company rules, stop bad habits, set priorities, and clarify accountabilities owned by the rep versus the manager or the firm. Doing performance reviews well reinforces effective leadership skills.

I recently published my new book, Aligning Strategy and Sales, and its entire tenth chapter focuses on performance reviews. Pulling from that section, here’s a guide for what to do before, during, and after the review.

Read the full article on HubSpot.

Sales Slump: 3 Tips for Implementing Strategic Compensation Plans

Strategic Compensation Planning

An estimated 85 percent of companies in the United States use incentive plans, accounting for approximately 40 percent of total sales compensation. That’s a lot of money and managerial effort. Yet in a recent survey of 700 firms by CSO Insights, 20 percent reported that their compensation plans had “minimal or no impact on selling behavior,” 12 percent said they “do not know” about the impact of their plan and only 8.9 percent found their pay policy “consistently driving precise selling behavior.”

One reason for disconnects between incentives and salesperson behavior is that, in many firms, the people designing pay plans do so according to an obsolete vision of sales tasks. There’s no such thing as effective selling if that selling doesn’t link toyour firm’s strategy. To bridge this gap, businesses should adhere to the following when designing their compensation plans…

Read the full article on Business 2 Community.

Books We Trust: Interview with Frank Cespedes

Trust Matters Blog

This week sees the publication of a new book I want to bring to your attention. It’s by Frank Cespedes, a professor at Harvard Business School, and an old friend from our mutual consulting days. The book is called Aligning Strategy and Sales, and it might have been called “The Massive Business Gap Sitting Right Before Your Eyes.” To use an overly simple athletic metaphor, the handoff from strategy to sales is the source of a great deal of lost value.

I hesitate to call it a revolutionary book – but you haven’t seen anything like it. It’s very important. Especially for those of you in sales, I recommend it.

Read the full interview with Charles H. Green on the Trust Matters Blog.

The Strategic Way To Hire a Sales Team

HBS Working Knowledge

The equivalent of an entire sales force is replaced at many firms every four years, so it’s critical that go-to-market initiatives remain tied to strategic goals. Frank Cespedes explains how in his book, Aligning Strategy and Sales.

Too often, there’s a huge gap between a company’s overall business strategy and the way its salesforce operates in the field. In fact, says Frank V. Cespedes, articles and books about strategy rarely take sales into consideration at all.

“Everybody talks about the importance of talent management,” says Cespedes, a senior lecturer in the Entrepreneurial Management unit at Harvard Business School. “But far fewer confront a basic fact: Companies typically spend much more money and hire many more people, annually, in their sales function than they do anywhere else in the firm. At Google and Groupon, for instance, a higher percentage of employees work in sales than engineering or data mining. And at Facebook the salesforce’s ability to translate ‘likes’ into advertisers will make or break that company’s valuation and fortunes going forward.”

Read the full article and an excerpt from Aligning Strategy and Sales on Harvard Business School Working Knowledge.

MarketingSherpa Weekly Book Giveaway

MarketingSherpa

That gap between your company’s sales efforts and strategy? It’s real – and a huge vulnerability. Addressing that gap, actionably and with attention to relevant research, is the focus of this book.

In Aligning Strategy and Sales: The Choices, Systems, and Behaviors that Drive Effective Selling, Harvard Business School professor Frank Cespedes equips you to link your go-to-market initiatives with strategic goals. Cespedes offers a road map to articulate strategy in ways that people in the field can understand and that will fuel the behaviors required for profitable growth.

Enter this week’s MarketingSherpa Weekly Book Giveaway for a chance to win a copy of Aligning Strategy and Sales.

What You Don’t Know About Sales Can Hurt Your Strategy

What You Don’t Know About Sales Can Hurt Your Strategy

The goal of strategy is profitable growth, meaning economic value above the firm’s cost of capital. There are basically four ways to create that value: (1) invest in projects that earn more than their cost of capital; (2) increase profits from existing capital investments; (3) reduce the assets devoted to activities that earn less than their cost of capital; and (4) reduce the cost of capital itself.

In my experience, most CEOs, CFOs, and other C-suite executives involved in strategy formulation know these finance basics. (Or, they learn fast after a few investor meetings.) But far fewer understand and operationalize the core sales factors that materially affect each value creation lever.

Read the full article on Harvard Business Review.

4 Steps to Identifying – and Engaging – Your Core Customers

Entrepreneur

In the first decade of the 21st century, less than half of all startups in the U.S. survived beyond three years. And of the nearly 44,000 companies founded in 2000 and listed in the Capital IQ database, less than six percent achieved more than $10 million in revenues by 2010. As venture capitalist David Lee once said, “It’s never been easier to start a company and never harder to build one.”

One of the main reasons for this failure rate is entrepreneurs don’t identify their target demographic correctly. Without clarifying your core customers, selling is ultimately a function of individual, heroic efforts in the field, not a scalable platform for growth.

The following four steps can reverse this downward trend…

Read the full article on Entrepreneur.com.

The Importance of Aligning Strategy and Sales

CRM Magazine

Every year, U.S. companies spend more than $900 billion on their sales forces, but typically see only 50 to 60 percent of the financial performance they’re promised. The problem, Harvard Business School Professor Frank Cespedes says, is the “disconnect between selling behaviors and strategy. In his book Aligning Strategy and Sales, Cespedes discusses why bringing these two elements together is crucial for every company’s longevity, and offers his advice for making the realignment a reality. He shared his insight with Associate Editor Maria Minsker.

Read the full interview on CRM Magazine.

How to Shrink the Gap between Sales and Strategy—An Interview with Frank Cespedes

RainToday.com

For a business to grow, it must have a strategy and that strategy must be aligned with sales. The problem is often companies don’t have a strategy, or if they do, there’s a gap between that strategy and what their sales teams are doing.

“Research shows relatively few companies successfully execute their strategies. And on average companies deliver only about 50% of the financial performance that their strategies and sales forecasts promise,” says Frank Cespedes, author of Aligning Strategy and Sales. “Now that’s a lot of wasted money and effort. … Companies regularly overpromise and under-deliver when it comes to sales and profitable growth.”

The problem stems partly from impractical strategy planning processes, he says. A firm might take five months doing planning. In the meantime, the market continues to move and sales must respond issue by issue and account by account. That means the eventual strategy is irrelevant to sales executives.

Read the full article and listen to the interview on RainToday.com.

Book Review: Getting Beyond Yes

Harvard Business School

Every company needs a strategy—a forward-looking plan for the future—and every company needs to keep that bottom line growing through sales. But all too often, the folks devising the grand plan and the folks sealing the deals are not on the same page.

In his new book, Aligning Strategy and Sales: The Choices, Systems, and Behaviors that Drive Effective Selling, Frank V. Cespedes laments the fact that sales and strategy rarely make a joint and complementary appearance in MBA classrooms or academic journals. Professors stick safely to the realm of publishable strategy theories; the sales side is left in the hands of consultants and trainers. This, he says, is just the start of a larger problem: the inability of businesses to tie their sales practices to their overall strategy.

Read the full review in the HBS Alumni Bulletin.