Call us optimists, but we’ve always thought people are inherently rational. They tend to act in a logical way based what they perceive as their natural boundaries.
Whether you like it or not, every organization sets up a game. There are always winners and losers. And often, the behavior from your partners or a direct sales force you hate the most is actions you have incented.
When considering the game you have set up within your sales organization, it’s worth a look at the artifacts of control that you have in place. Specifically, there are two artifacts of control:
- Hard artifacts of control: Things that you will and will not allow
- Soft artifacts of control: Things that you will and will not encourage
Hard artifacts of control
Hard artifacts are easy to identify. It all comes down to terms of employment or what is allowed in your system.
The key to hard artifacts of control is you should use them sparingly but have teeth when you do. It is the stick for bad behavior and makes sure your sales force operates above the line. This would include behavior like not letting your sales reps change who the partner of record is in your deal registration system, or preventing discounting of a sale over a certain amount without approval.
When you consider a global organization, you should keep your hard artifacts at the level of your corporate values, goals, and legal requirements.
Soft artifacts of control
Soft artifacts can be trickier to notice. They tend to focus on 3 things:
- What are people being compensated on
- What is on the scorecard
- What is being reported
How you deal with compensation, scorecards, and reporting has a profound impact on how your sales force will work with your partners and customers.
You need your compensation strategy to encourage hitting quarterly goals, but not at the expense of damaging partner relationships or long-term pipeline. A mentor of mine once said, “The fastest way to get the apples is to cut down the trees, but it isn’t the smartest.”
Your scorecard is also critical, mainly because in many organizations it influences promotion. If the purpose of compensation is to incent short-term behavior but not damage long, then the purpose of the scorecard is to get people thinking and acting towards long-term behavior. It offers an opportunity for looking at the long-term goals of the business and getting people to align with them.
Last is general reporting. Even if it doesn’t impact promotion or money, any sales organization is at its core competitive. If you report on something, then people will tend to look to see how they rank with everyone else. Metrics like average velocity or margin are a good way to subtly push behaviors one direction or another.
While all three soft artifacts are based on personal incentives, they represent three very different motivations: long-term monetary incentives, short-term monetary incentives and reputation. In any competitive environment, none of these should be underestimated.
At the end of the day, you set the game and others just play it. While you can’t prevent people from gaming the system, you can build in controls that let you both mitigate bad behavior and encourage good.