Are My Sales People Too Comfortable?

I know that a productive sales force is one of the keys to our future success. It’s time for them to put things in gear. I worry that things may be too comfortable around here. Any suggestions?

Thoughts of the Day: Agree on goals and measure performance against cost. Involve people in solving tough problems to get engagement and growth. Be clear about your Conditions of Success© and make sure your company’s needs get met.

Good news is that there is a sales team in place. Any company looking to grow has to have people in place to help bring in new business. Now it’s time to figure out what your company needs. Put your sales people on a mission. Compare the payoff of sales to the cost of acquisition.

Here’s an example of how to calculate a sales goal.

  • Let’s say that the sales person costs $100k, including salary and benefits, travel costs, desk, phone, managers time, etc..
  • Assume that the company’s gross profit is 60% of revenue.
  • Assign a minimum standard multiple of 3x cost to what a sales person should bring in.
  • Multiply sales person’s cost of $100k x 3 (minimum standard multiple)  = $300k.
  • Divide the $300k by the company’s gross profit of 60% to get a revenue goal = $500k minimum revenue sales goal.
  • Compare that to what sales people in your company and industry are already producing today – is that high, low or in the ballpark.
  • Adjust the goal up, if you think there’s room to produce more. Resist the temptation to bring the goal down to make it more realistic. If you’re not making money on your sales people’s efforts, you have to figure out what else to do.

Now work backwards. What’s an average sale for your company? Divide the minimum revenue sales goal by the average sale. That’s the number of sales per year this sales person has to produce.

Wondering how many sales people you need? Figure out the company’s overall sales target for the year. Deduct the amount of revenue that will just roll in the door, from existing clients, from the website, any other non-sales force related activities. The remainder is what the sales force has to bring on board. Divide by the minimum revenue sales goal per person. That’s the number of sales people you’ll need, if all sales people are just hitting minimum performance.

Want to break through to more than minimum performance? There’s real value in giving people challenges. Gather your sales team to brainstorm how they could kick sales into high gear.

When measuring and managing people it’s best to know how high to set the performance bar. Take a look at what people on the sales team have produced in previous years. Find out what competitors demand of their sales personnel.

Take a look at how sales conditions have changed over the past few years. For many companies the sales cycle has gotten longer. The number of sales per sales person has also gone down, as sales people spend more time nurturing potential sales along a longer path to close. That’s lost opportunity, unless you can shorten the sales cycle.

Is there anyone on the team who seems to be getting any performance breakthrough? What can be done to model their behavior, attitude and skills?

Maybe it’s time for some sales training. Everyone gets rusty. Getting into a structure to exercise and build sales skills could be exactly what the sales team needs to get their game on.

Make it clear what you expect. Make sure people know you’re watching what’s going on. Put performance reports in a place where everyone can see what’s going on. Don’t hesitate to make changes if someone isn’t trying.

Ask people to make incremental performance improvements. Increase sales results a little each month. Push for one more sales call, one more prospect, one more referral request. They’ll add up over the course of the year.


Looking for a good book? 52 Sales Management Tips: The Sales Managers Success Guide, by Steven Rosen.

Want to print this article? Are my sales people too comfortable


Don’t Rush to Get a New Employee on Board

33% – 46% of new hires fail within 18 months; majority fail for attitude. More than 50% of the time hiring managers regret their decision

I was in too much of a hurry last year, and hired the wrong person. It turned into a real headache as we clashed about nearly everything, from how to do the work, to who was responsible for what. Finally I let her go. It cost me a lot of time, energy, and lost opportunity. I don’t want to go there again. What can I do different next time?

Thoughts of the Day: Assessing pre-hire is crucial, if difficult. Understand your company’s culture. Take the time to build a hiring system. Train new hires on culture as well as skill. Build bench strength. Deal with mistakes quickly.               

Most interviewers focus on interviewing for job skill. Statistics indicate that hiring managers are doing a good job of figuring out which candidates have the skills needed to do the job, and which don’t. Only 1 in 10 hires fails for skill.

Spend more time learning how to perfect the attitude / behavior interviews. Recognize that every company is unique. Specific skills are needed to perform tasks specific to the company. There are also attitudes and codes of behavior unique to each company.

Entrepreneurial companies have cultures that tend towards throwing people into the deep end of the pool, asking people to solve problems with imperfect information, encouraging people who continue to learn new things and rewarding people who take initiative well beyond the defined scope of their job. That’s fine as long as you hire for those attributes. But watch out if that’s your culture and you hire someone who values a well laid out set of procedures, someone who waits for the boss to give direction, who avoids risk, and who values routine, repetitive activities. Right person, wrong company.

Make a list of attributes that do and don’t work in your company. Look at the strongest and weakest performers in your company today. Put skills aside, list successful and unsuccessful behaviors and attitudes.

Build a set of questions that help you find out where candidates are coming from, relative to your company’s success behaviors. Ask candidates questions about what they prefer. Ask candidates to describe their best and worst bosses. Ask them to relate attributes and behaviors of those bosses to what works and doesn’t work for them. 

Use the same questions on every interview and keep notes on candidate answers on file. Track successful and unsuccessful hires and compare to interview answers. Look for patterns.

While you don’t want a company of robots, it is important to recognize that culture and values can be the glue that binds employees together. Put new employees through an orientation program to help them understand the company’s stated and implied rules of behavior. Assign a mentor to each new employee. Encourage diversity of backgrounds, while developing a uniform code of behavior.

As much as possible, hire from the bottom, train and promote. Have every person in the company be responsible for identifying and training their replacement. Four things will result. One, new hires who don’t make it will be at the entry level, lowest risk, easiest to fill positions. Two, employees in line for promotions will have already proven themselves on culture fit. Three, employees will know they fit and have a future within your company. Four, it will be much easier to fill open positions, focusing on skill training rather than culture and behavior.

Even with a system to hire, a sound on-boarding process, and a program to grow talent internally, you’ll still make hiring mistakes. It’s impossible to be perfect all the time. When there is a problem address it quickly. Implement skill and behavior training and look for immediate results. Assess the facts of the situation and avoid living in the land of hope. If things don’t turn around quickly, be prepared to admit there’s a mistake and encourage the employee to move on. 


Looking for a good book? Hiring for Attitude; A Revolutionary Approach to Recruiting Star Performers with Both Tremendous Skill and Superb Attitude, by Mike Murphy.

Here’s the PDF: 4.25.13 – Don’t Rush to Get a New Employee On Board


Say No to Being ‘Yessed’ to Death

One of our key employees  yes’s us to death. She tells us what she thinks we want to hear. I don’t know how to get across to her that we need to know what’s going on – good and bad – so she – and we – can deal with it.

Thoughts of the Day:  Make sure you’re emphasizing the right things. Set up a process for identifying and solving problems.  Log and prioritize issues.  Reward employees who seek to improve.

It can be scary to admit that something’s gone wrong or that one is in over his/her head. It’s natural to avoid risk. How you lead your employees will speak volumes about your company’s ability to make progress on big and little issues  – now and in the future.

When things go wrong, how do you react? Do you get upset? Or, do you put on a game face and embrace opportunities to make the organization better?

It takes time to change. People have to be able to step back and look at what’s going on. If they’re already overbooked, an interruption is a burden that leads to more overtime, less productivity, and more blaming when work doesn’t go out on time. Who wants to deal with that? Better to ignore the problem, hope it goes away. Instead, set up an environment where change can happen.

Look at workload. If employees don’t have some free time during the day to work on improvements, if they’re always behind, fix it. Look at how work flows through that area. Reorganize tasks and get additional staff. It may seem like it costs more, but until you make time to deal with problems at the root, they just keep costing you time, money and energy.

Even with extra time in the day, it’s impossible to deal with everything at once. Set up a log where everyone can record things that need to be worked on. Schedule work sessions to review the log. Assign people to work on items and review outcomes. Report company-wide about improvements that are being made.

Teach employees to consistently approach problem solving. Step 1: identify the problem. Step 2: Define the problem. Step 3. Make a list of all possible causes. Step 4. Decide who else to involve in the problem solving process. Step 5. Brainstorm possible solutions. Step 6. Try out solutions. Step 7. Evaluate results. Step 8. Assess outcomes. Step 9. Make adjustments. Step 10. Write it up for future reference.

Teach employees how to look for root causes. Talk about the importance of investigating why something went wrong, rather than fixing the surface. Make sure employees understand that permanently getting rid of problems requires tracing things back to their source of origin.

Sound like a lot? So is overlooking things that need fixing. A systematic approach to problem solving will lead to better outcomes and more permanent solutions. And long term, that means less stress, higher productivity and bottom line savings.

Make it clear that as problems come up, they are to be solved, not ignored. Make that a core value of the company. Teach employees that they contribute the most when they look to build better outcomes.

Look at what happens when employees come forward with issues. Are they promoted or penalized? Are they recognized for being outspoken, or shoved to the side as always complaining or challenging the status quo? Build a better organization by recognizing employees who identify problems and solutions over those who promote the values of being in control and covering up.

Loss of status, credibility or opportunity for promotion may go along with admitting a person can’t handle a situation.  Make sure this doesn’t happen in your company. Make people hero’s and winners because they continuously look for ways to improve what’s going on. Talk with your yes-ing employee about how her life gets better when she eliminates stress by working with openly with team members and management to make things work better.

Looking for a good book?

pdf version


What Should I be Tracking?

What gets reported on is what gets managed; make sure you’re managing things that will get you where you want to go.

This year will be a critical year for us. What should I do to insure we’re all accountable, all delivering what’s expected. I also want to spot any trouble spots early enough to do something about it, and quickly get the right people working on solutions.

Thoughts of the Day: Entrepreneurial business owners tend to hold control of their companies close to the vest. When it comes to stock, that’s a good thing. They have 51% of shares, or more, and that gives them the ability to decide what does / doesn’t get done. They can take a long view of things, and know that they’re building something for the future, while they’re working to make a profit for today.

When it comes to reporting on results, owners of privately held businesses may keep their cards too close to the vest. It’s better to widely distribute data so people can engage, spot problems, correct what’s wrong and build on successes. Get everyone in the company on board by publicizing results.

It makes sense to put someone in finance in charge of gathering information and distributing reports. Finance is the most familiar with numbers. And they are often the most agile when it comes to compiling data.

Here are a few questions to ask, to get started with what to track:

  • What are the company’s major goals this year?
  • What has to happen to insure the company hits its targets this year?
  • Are the goals consistent across departments, no conflicting priorities?

Set up targets to track by thinking functionally. Consider the following measures. Let me know if you’ve found some of your own that are especially helpful. If you’re struggling to get a scorecard set up, give me a call or send me an email – will be glad to help you out!


  • # of sales – total, by person, by customer and product category
  • Average days to sell – from lead coming in to close and implement
  • Closing ratio – % won and % lost – track by category and overall
  • Monthly and annual actual vs. goal, and vs. previous year
  • # new, lost, expanding and declining customers
  • # prospects and $ volume in the pipeline, close value of the pipeline


  • Profit – gross and net,  $ and %’s
  • Profit / product
  • Overhead budget vs. actual $ – total and by category: General & Administrative, Marketing & Sales, Overhead Salaries and Benefits
  • Amount of reserves and  weekly contribution to reserves
  • Total loans outstanding, % of credit line outstanding
  • Accounts Receivable/Revenue, $/% at 30, 60, 90, over 90 days outstanding


  • Goal for total leads vs. actual lead produced
  • Productivity of specific marketing initiatives – performance vs. goal
  • Budget for marketing vs. actual expenses
  • Ratio of marketing spend to revenue and gross profit – moving target, should be declining as marketing productivity increases revenue
  • Status of new product launches, new prospect searches
  • Ratios for new products / old customers and old products / new customers


  • COGS –overall, then break out labor and materials, compare various categories to revenue by product and overall
  • Measures for Quality, On time delivery, Customer satisfaction
  • Average days to produce – overall and by product
  • Inventory: days on hand, budget vs. actual, turns
  • Production hours: planned vs. used
  • Amounts: booked, shipped, in backlog
  • Equipment on line / off line, planned for replacement

Human Resources

  • Training budget vs. spend, # programs on time / delayed
  • # employees reviewed, pending
  • # of employees at, above, below standard
  • # Open positions, # positions on warning
  • Backlog of candidates / position
  • #/$ raises due
  • Budget vs. actual for salaries and benefits
  • Status of new benefit initiatives, benefits under review

Recap results weekly. Track stats over time, by department. Supplement with detail in cases where things are off. Distribute reports widely to get everyone involved. Meet weekly to review reports and ask people to react when results are below target.

Looking for a good book? The Org: The Underlying Logic of the Office by Ray Fisman and Tim Sullivan.

pdf version


Too Many People in Charge Cause Waste

Q: I know my people are good and their hearts are in the right place. There’s a real desire to get work done. Unfortunately there’s confusion as to who should do what. That keeps turning into work hours we can’t invoice because we duplicated effort. That’s costing me both revenue and profit.

Thoughts of the Day:

Avoid the common mistake of having too many people in charge, which ultimately means no one is in charge. Set up standards, accountabilities and chain of command. Practice using the tools and refine them until it’s a waste-free operation.

Overlap of duties and areas of responsibility can be a real profit waster. Defining who does what eliminates overlap and leads to accountability. That translates into less duplication and ultimately lower costs and increases profit.

Figure out the organization chart from bottom up and top down. Try to address the following questions:

  • Do individuals understand their assignments?
  • Is everyone fully trained for the job they’re assigned to do?
  • Where do individual responsibilities stop and start?
  • Are people clear who they report to, who’s in charge?
  • Do people report to managers who understand and can properly oversee what’s going on?
  • Who’s responsible for setting standards, measuring performance, reporting on results?
  • Who does training and remediation?
  • How do people come together to work on solutions?

Look at production breakdowns. Why are problems cropping up? Are there re-dos due to errors? What about excessive production due to lack of awareness that some task had already been completed?

Ask for a written diagram of how work flows. Publish the diagram in places where everyone in the organization can refer to it. When issues or questions crop up, refer to the diagram to determine who should be involved.

Set standards for what’s acceptable. Set up rules about chain of command and accountability by answering the following questions:

  • For each task, what is the standard for acceptable completion?
  • Who do people go to when they have a question or a problem?
  • If there’s a dispute, how does that get routed through the organization?
  • Who gets involved to recognize over or under performance?

Once rules and job flow are set up, it takes practice to make things work smoothly. Ask managers and employees to work through the details. Encourage people to try new ways of doing things. Get your people to grow by holding them responsible for figuring the best ways to do their work.

Set up meeting times for people to work together on making improvements throughout the organization. Insist that people attend and participate. Set an agenda for the next meeting at the end of the preceding meeting. Keep energy flow up by asking people to focus on how they want things to be in the future and working backwards from that to where they are at present.

Hold people accountable for learning and changing as well as for reporting to the organization on the improvements they’re achieving.  Use meetings to recognize good performers as well as to work out problems.

Show managers and employees how cutting out waste turns into higher overall profits. Get people focused on the bottom line results of making improvements. Build a program through which people share in some of the additional profits.

Decide how you’re going to reward people; will it be with cash bonuses, events, activities, gifts, etc. Consider the value of building up team pride by recognizing and bringing together groups of people who produce improved results. Consider a dinner of the month club or a quarterly offsite. Combine that with individual performance improvement programs, where people have more choice over the kinds of rewards they compete for.

Looking for a good book? “Getting Organized: Improving Focus, Organization and Productivity” by Chris Crouch.

pdf version