Sales Competencies that Drive Revenues Russell Ward February, 2009 SM We are going to explore today an innovative way of looking at sales effectiveness. To help do this, Russell Ward, the Managing Director of a consultancy, Silent Edge, is going to explain exactly how he went about this and what the implications are. So Russell, tell me about why such an approach that you have taken is both innovative and effective. RW Well basically the background to how this all started: I was a sales director for eleven years before starting Silent Edge, and my business partner was a sales director for seven years. And we spent a lot of money on sales training. And we found that there was a big issue because all the step change promise and performance that we were told we were going to get from the sales training companies we employed didn’t happen. And I wanted to understand why that was. For me there were a number of factors. First of all the sheep dip approach of sales training, meaning that you just chuck everyone in a room for a couple of days, you mix the roles up and they just literally go in and come out again, just didn’t work. There was no measurement put in place to prove that there was a gain in revenue, or a profit. There was no engagement with the managers, so there was no sustainability. For those reasons we started to wonder how can we do something different? The issue for us was actually some of the content was very good, so it wasn’t about writing a new way of selling. Some of the people were very good. So what was it? What would be different? How would you go about it? And the issue was that if you are going to improve sales performance, you have to change the behaviour of the people that you are going to develop and train. And that wasn’t happening throughout that methodology. So we realised at the same time that when people were looking at performance‐ sales directors‐they were actually just looking at numbers. So who was their top rep? It was the person with the biggest number. And I have had my experience, where I have had many sales people work for me, that have had a big number because they have brought in one big deal six months ago. So we realised at that point, no one was measuring sales capability in the true form of skills. And so we went about a way, in developing a way, to do that in a live situation. SM So tell me about that, then – so it’s real, it’s live and you actually watched sales people at work? RW Absolutely. That was very important. When we started the competency, where this came about was a client and we did actually start as a consultancy in the first year or two, and we were going out as interim sales directors with sales forces. And we were writing reports and telling the chief executives how they should improve their teams. And one chief executive, I had recommended that they actually sack their whole sales force and keep the sales director, and he thought that was a rather bullish report and he said to me ‘how have you come about this? Why do you know this is true, that I should do this?’ And I said ‘well, it’s because I have gone out on two meetings with each person, and during those meetings they haven’t performed’. And he said ‘well how long were the meetings?’ and I said ‘an hour’. He said ‘that’s a pretty critical hour then for you to be looking at them’. And I thought, critical hour, there is something in that and I realised that if we took that moment, that sixty minutes, it’s so fundamentally important because whatever happens in that sixty minutes will determine whether you do business with that organisation‐whether you progress the deal. And I realised that there was an opportunity there to actually break those sixty minutes down into what should happen. All the component pieces that should happen in that sixty minutes. And that is how we started to create the framework. SM So you developed the framework – tell me a bit more about this competency framework. RW When we started out we did it in what I would call a lumpy form, very top level form, which actually there are an awful lot of companies creating competency frameworks at the moment and they are very lumpy. They are not detailed enough. And what we did was we created a scoring system where we had about fifteen different competencies that we were measuring and we were doing it on a one to five points scale. The problem with that was that my partner and I measured a very successful sales person, and in one meeting she scored him very high and in another meeting I scored him very low and we were in separate meetings. When we came together, we thought this person could not have had such a different performance. And we realised in discussing the meetings, he actually performed in a very similar way. We realised that the subjectivity of what we were doing was causing a really big – and it was not a scalable solution. The way in which if two people go into a bar and have a drink – one might look across the bar and see a girl, think she is actually gorgeous and the other guy doesn’t think she is gorgeous at all. We are human; we see things in different ways. So we had to create an objective way of looking at performance in those meetings and in doing that, that is where the detail started to come. So we had to create a binary form, where it was black and white – it either happens or it doesn’t happen. So if we are to go into a new business meeting, we look for 175 different things, or thereabouts, to happen in an hour. They either happen or they don’t. And that way, all of those individual items are independently statistically weighted and from there we can actually start to create the statistics, which enable us to see the strengths and weaknesses of people in their live performance. SM So presumably you cluster those things together, you wouldn’t have 175 floating around? RW It’s a bit like a three tier pyramid. At the top you have the overall score for the sales person’s performance, you then have a set of competencies – five competencies – for their live selling capability and then within those competencies you have dimensions, and then within the dimensions you have all the observations that we look for. So it’s really easy to read – we create charts and graphs. Sales people don’t like to read anything, they like to see pictures and use that information to move very quickly. So you just show them a really clear chart of their actual capability and the gaps are obviously where they need to get to. So this is all about best practice. And that has worked extremely well. SM So, let’s look at real world, real practice, implementing this in live situations. RW Yes, OK. There are two ways of doing it: either we at Silent Edge will go out on live meetings and we will observe the performance of people in those meetings, or the piece that is now preferred, especially within the economic climate, is that we train the sales managers to use our system and our technology and they go out and evaluate their staff in live meetings. SM So if you identify some issues that are either weak or strong, where do you go from there then in a one to one situation where you are coaching your sales person? RW The beauty of this is that the information is incredibly accurate, so that what we do is we take the data and then we create the bespoke training and skills development programmes using that data. The data is also used by the sales manager, so that they can coach and sustain the performance. So we have a two pronged effect: skills development programmes which are very precise and accurate and people get what they need, not what the company thinks they need, and you get the data that can be used by the sales manager to drive and sustain that performance. This works in every role: all the telephone roles, all the call centres – inbound, outbound – field sales, account management, new business, complex sales, sales management and sales directors. SM And this is sustainable, is it? RW The sustainability comes by getting the change in the management. The majority of sales managers have got their job because they are very good at selling and actually most of them haven’t had proper professional skills training on how to be a sales manager. When you teach your sales management one, how to use the tools; and two, how to be a good sales manager – you suddenly get the sustainability. When you re‐evaluate someone’s skill set, their motivation to change is quite high because they know they are going to be re‐
evaluated, which means they start to do something about taking on board the learning. So the learning becomes sticky and really significant. SM Give me some real results, Russell. RW Sure. We worked with a team of 26 people in Cable and Wireless and their telemarketing team and their managers: within six months they went from £750,000 a month order intake to £4mn a month order intake – that’s 450% growth. We worked with Vistorm, an internet security software company; they have had 30% growth in their first year. 3663: 48 national account managers, and during the first year of working with them, they had a £6mn profit increase, which is a 13% increase in their profit. Just after three months of working with Calix, a communications company, they won three deals with £2.3 and £0.5m in profit, directly related to what we did. We work in the call centre environment, and we worked with a large American bank and they had a very significant growth – around 20% growth in their call centre. So this is real tangible stuff. The sort of revenue growth we get and the profitability increase that we get for organisations is nothing like it – it’s not been seen the in the market before. SM That’s music to a salesperson’s ears, I guess. Thank you very much.