As a sales leader this makes my left eye twitch :-) As a student of sales leadership, I love learning from perspectives that challenge the conventional wisdom. Would love to learn more about the mechanics, for example, how do you manage compensation in this model?
Hey Jason - compensation is managed the same if it's based on a percentage of revenue. The sales leader holds the budget/quota/goal - but instead of dividing that number up and handing it to the sales reps - you ask the reps to set their own quarterly goals; if you have the right team, their collective number is higher than your budget/quota/goal. Your job is to make sure that they have the tools to hit it.
Quota's are alive and well in many organizations and I believe it's because it's easier to just divvy up the budget and divide it by the number of reps (of course this is simplified and there are managers that do look at each reps performance and try to allocate the "right" number to their reps). But as you pointed out - this is one-sided.
I love to see more engaged leadership (which takes more work) to collaborate with their reps to create meaningful goals, use the incentives plans they have to link their goals and activities and create immense value through sales for their companies. It's the ultimate win-win-win.
Sales is hard, there are other ways to create motivation and discipline to hit our goals.
As a sales leader this makes my left eye twitch :-) As a student of sales leadership, I love learning from perspectives that challenge the conventional wisdom. Would love to learn more about the mechanics, for example, how do you manage compensation in this model?
Hey Jason - compensation is managed the same if it's based on a percentage of revenue. The sales leader holds the budget/quota/goal - but instead of dividing that number up and handing it to the sales reps - you ask the reps to set their own quarterly goals; if you have the right team, their collective number is higher than your budget/quota/goal. Your job is to make sure that they have the tools to hit it.
Thanks Joe. Super interesting premise, will definitely look hard at this approach next time I do comp and revenue planning.
Jim - Great comments.
Quota's are alive and well in many organizations and I believe it's because it's easier to just divvy up the budget and divide it by the number of reps (of course this is simplified and there are managers that do look at each reps performance and try to allocate the "right" number to their reps). But as you pointed out - this is one-sided.
I love to see more engaged leadership (which takes more work) to collaborate with their reps to create meaningful goals, use the incentives plans they have to link their goals and activities and create immense value through sales for their companies. It's the ultimate win-win-win.
Sales is hard, there are other ways to create motivation and discipline to hit our goals.