So we’re back in D.C. after a few days in beautiful San Francisco where a few members of our LumeWorks team went to the Sales 3.0 conference and learned all about the trends and strategies for B2B sales success. Between chatting with people at the LumeWorks booth and trying to take candid pics for our Twitter (check us out @lumeworks), we managed to squeeze in time to attend several panels and breakaway sessions.
What does Sales 3.0 mean anyway?
Wen: So the sales performance driver in the 1.0 period was really about hustle - certain things like being genuinely interested in other people and maintaining a positive mental attitude have stood the test of time, but the influx of technology and data marked a transition into a new era. The Sales 2.0 period was characterized by the rise of social, mobile, big data, cloud, and analytics so success depended on an ability to focus on the customer experience, being metrics-driven, being an advisor, and of course - mastering social media.
Chester: Yeah, and now new technologies like artificial intelligence and machine learning are ushering in total digital transformation.The key sales performance driver in the 3.0 era is science. Like Gerhard said, 2.0 was about mastering information, 3.0 is about mastering transformation.
How do you see LumeWorks fitting into the Sales 3.0 world?
Chester: One topic on nearly every speaker’s agenda was sales enablement - how do we make it easier for our sales employees to make sales? The sales world has come a long way in giving sales managers and their employees access to metrics beyond the traditional measures of leads, revenue, etc. LumeWorks gives sales teams the ability to define and measure the specific behaviors and skills that lead to desired outcomes, and develop their employees accordingly.
Wen: No matter how advanced analytics or technology becomes, sales is still inherently a business centered around people. LumeWorks is focused on developing people and teaching sales reps how they can build the skills to hit their targets. Coaching from a pedagogically-oriented perspective will also help differentiate sales teams in an increasingly competitive environment.
What was your favorite panelist session?
Wen: I liked the “How to Build a Mentally Tough Team” session with Steve Siebold. It was pretty cool to hear about some of the strategies to combat “approval addiction” and to think about how we could apply those strategies in the start-up world. I also liked Jeb Blount’s talk on Sales EQ - definitely interesting to think about psychology behind decision-making and how to prepare for human irrationality.
Chester: I really enjoyed the “Setting a Game Plan” session let by Bryan Summerhays. Bryan demonstrated the right way to use sales metrics in coaching and development, and even modeled an effective coaching session between a manager and rep. It was great to see the emphasis on deliberate and metric-based coaching and development, a trend that fits neatly with the vision of LumeWorks.
Best quote of the conference - go!
Wen: “Stop PITCH slapping - people buy for their reasons, not yours”
Chester: “Technology is getting better. How will people get better?”
Overall, what were your biggest takeaways? Any big surprises?
Chester: Given the emphasis on the evolving landscape of tech in sales, it was surprising to me that so much of the content revolved around the area of sales that haven’t changed much at all - people. No matter what advances are made in technology, effective management of people (and how they use that technology) will always be at the center of successful sales teams.
Wen: People should think about technology as a way enable us to do our jobs more easily rather than as a replacement for humans. Technology alone won’t solve challenges around ineffective managers or difficult clients, but it can definitely help make the process a bit smoother (as long as you know how to use it).
If you were to go back in time to spend a period in my seventh grade writer’s workshop at the dawn of a new school year, you’d undoubtedly hear the lamentations, sure and frequent: “I’m stuck,” or “I don’t have any ideas,” or “I don’t know where to start.”
We’ve all been there or seen it. It’s one of the most familiar tropes in the business school case catalog—the seasoned executive staring out her corner office window, feeling stuck. Granted, those cases are usually loaded with all sorts of big consequences, so feeling stuck isn’t just something the protagonist can force her way out of. But in most writing and work contexts, feeling stuck can be solved by simply starting yourself in motion. Whether it’s struggling to get started on a project, floundering with a complex business problem, or deliberating over a decision, we just need to get going.
Recently one of my clients shared with me a mantra that she repeats to keep herself moving and making progress: “she who writes, wins.” This reminded me of a phrase—writing is thinking—that I used to share with my writing workshop students. The idea, in both of our cases, is that one of the best ways to clarify our thinking is to start writing.
One exercise I used to do with my students was to ask them to choose a theme or topic from a running list they’d compiled, place their pen on the top line of a free page in their writer’s notebook and write without lifting pen from paper for five minutes. I would participate in this exercise along with them. After five minutes, a timer would buzz us back to attention, and we’d review the script that we’d just rapidly unfurled. We’d highlight keen insights and turns of phrase. We’d share with partners who would point out themes and ask questions about ideas the writer might want to explore further.
I found this process so compelling, that I took it on the road with me. Literally. On long road trips, my wife and I will take turns, forcing ourselves to speak aloud for five minutes straight—no pausing—as we motor down the highway. We follow with a two-minute period in which the listener poses questions or offers observations. Then, we switch. We’ve gone the entire length of I-70 across Ohio with this back and forth.
These exercises are great for self-discovery and often produce dreamlike stream-of-conscious narratives. But their value is far greater than the little bit of amusement they immediately produce. In pushing ourselves to get our thoughts out of our head, we are giving form to the shapeless. We are finding the boundaries of our thoughts and breaking them down into their separate and sometimes opposing parts.
In the many times I have conducted these exercises, I find that both my students and I pose questions in our writing. Were it not for the rules of the exercise, we might stop at the question. But we can’t stop, and the only logical next step when you have to keep moving is to write down possible answers.
Natalie Goldberg, in her classic “Writing Down the Bones” pushes aspiring writers to “make statements and answer questions.” In many ways, this idea squares with my experience at McKinsey, where partners push junior consultants to generate “day one hypotheses” and favor provocative statements over open ended questions. It seems counter-intuitive, but making statements can more effectively invite dialogue because it makes it easier for a counterpart to respond. They can agree or disagree, and now they have an anchor idea against which to offer a response. With an open ended question, we’re floating them out to sea without that anchor. Some will be strong navigators and feel confident in their course, others will struggle.
Goldberg calls writing “the act of burning through the fog in your mind.” Too often, we stand around and wait for the fog to clear. If we just get our pens moving, posing questions, pushing forward possible answers, something happens. The friction of pen on paper produces heat. And the fog burns away
For the past several years I’ve been helping a number of large organizations understand the strategic importance of closing their internal productivity gaps. The productivity gap between top performing employees and their less productive peers has a significant business impact.
In most companies, closing this performance gap could drive revenues up 5 to 10 percent. To put that in perspective, from 2010 to 2014, annual revenue growth at public companies averaged just 2.9 percent, according to Sageworks, a financial analytics firm. If companies could raise the capabilities of their least productive employees to average levels of productivity, they could essentially double revenue growth.
It is indeed possible for companies to support the growth of strugglers and meaningfully strengthen their teams. Two years ago, a client of mine at a global transportation company inherited a new sales team. Like many, this team consisted of a few high-performing outliers but most of the team had failed to meet sales goals for a string of consecutive quarters. Rather than shake up the team, my client instituted a set of good coaching practices and within two months, raised the productivity of those who had fallen behind. Now, two years into her tenure with this team, they are performing within the top 5% of sales teams in the company.
At LumeWorks, our clients have invested in systems and practices to increase the productivity of struggling team members, and in so doing have reshaped the reality of their organizations. Here are a few of the coaching strategies that we have found to be most effective:
1. Make time for coaching. Leaders of the best-performing teams we study, devote upwards of 60 percent of their time to individual coaching, spending much of their time in the field with their frontline workers. In order to make time for coaching, they tend to ruthlessly delegate administrative tasks to their assistants and support resources and create predictable routines, like following set observation schedules. In contrast, managers of the poorest performing teams typically spend less than 30 percent of their time on coaching activities. When these managers do spend time in the field, they often spend less of their time observing and coaching than intervening directly in their team members’ challenges.
2. Narrow the coaching focus. We study the comprehensive set of activities that a client’s employees undertake to fulfill their duties. For most roles, we find that there are two to three dozen of these discrete activities. But when we study performance in these activities, we find that only a handful account for the productivity gap between high and low performers. When managers know which activities are most pertinent to performance, they can provide much more targeted instruction and feedback.
One logistics client encouraged their sales representatives to spend the majority of their working time meeting with customers. When we studied this behavior, we saw that it actually did not correspond to higher performance. But when we looked at the amount of time sales representatives spent collaborating with their pricing and customer service teams—both internal support functions—we saw a strong positive connection between that behavior and higher sales. Managers can now coach their sales representatives to spend more time on internal collaboration and relatively less time with customers.
3. Contextualize goals. At a discount retailer, the difference between high and low performers was $25 in daily sales. In this case, upselling an item or two at each shift would put low performers in line with expectations. At a logistics company, adding one or two medium-sized accounts to a portfolio that, for a typical salesperson, already includes dozens, could boost an individual’s performance from the bottom to the middle. Sometimes, struggling employees feel daunted by the effort it might take to raise their performance. In most cases, providing them with tangible and reasonable goals that contextualize what it means to perform at the next level, helps people more effectively make that performance shift.
A little can go a long way when it comes to improving employee performance and accordingly - boosting company performance. While spending 60 percent of your time on team coaching may seem daunting, realize that for every small increment you increase your efforts, your team will grow and improve - and so will your business.
I started my career as a teacher. In that profession, you’d hear people suggest it took 5 years to hit peak performance. Others guessed it was as short as three years. Regardless of your position, everyone agrees it takes years to become a top teacher.
In many jobs, however, the learning curve is much shorter. And, counterintuitively, this can cause big problems for employers. For example, a new customer service employee might be able to perform most job tasks within 6 months. After that point, his or her productivity tends to plateau and even decline. The reasons for this trend vary. Repetitive tasks might drive low engagement. High turnover of coworkers might drive discouragement. Limited opportunities for rapid promotion might sap drive.
In Part 1 of our Tenure Analysis post, we discussed when and why skill plateaus occur. To recap, skill plateaus tend to occur across the board regardless of performance in a role. Sometimes top performers plateau because they have mastered their current role. But most employees plateau at different skill levels. So how do you address the unique development needs of individuals? How do you push past the pesky problem of development plateaus?
Reigniting development through personalized support
The best organizations give employees room for upward mobility and continued skill development. Most companies have at least a basic employee training program in place. But pushing past plateaus requires a structured and personalized approach to employee development. Below are the 3 key components for reducing and overcoming development plateaus:
1. Set clear development goals around "differentiating" skills
Imagine you asked your team to write down development goals for the next 3 months. Would their goals and expectations be the same as yours? Often they are not. Gallup found that clarity of expectations drives both engagement and performance. Start goal setting by identifying core job skills. Reflect on the small set of skills top performers show that their peers do not. In most jobs, 4-5 core skills distinguish top performers from their peers. In sales roles, these are usually skills like:
Persisting when customers push back
Communicating value vs. price
Working to build this small set of differentiating skills improves productivity. It also helps you stay focused. After identifying the small set of skills that matter, work with your team to set the right targets. Setting the right goals is the first step toward a culture that promotes growth. Tracking progress over time is step two.
LumeWorks served a sales team that had not yet identified these differentiating skills. Sales reps had widely divergent goal attainment rates. Management measured performance on a typical set of competencies. These included process management and product knowledge. We helped them identify additional categories that differentiated sales performance. The company had not created a way to measure performance in three areas– “rapport building”, “consulting and advising”, and “selling mindset” – that drive high performance. We created performance goals in these areas to support employee development and improve organizational performance in areas where skills not only plateau, but show decline over time (see figure 1).
Figure 1: Employee skill development over time for an inside sales team
2. Overcome the “skill drain” by building manager capabilities
As we've discussed before, when top performers leave, it creates an organization-wide skill plateau. Organizations can mitigate this “skill drain” as long as others step in fill the gap. But how?
First, organizations need to expand their development lens beyond high potentials. We know organizations are very bad at identifying high potential performers. As much as 40% of high potentials might not actually fit that label. Expanding the lens beyond high performers also limits the impact of the loss of a single person.
To carry this out, organizations need to build managers' coaching capabilities. We know that managers account for up to 70% of the variance in employee engagement across teams. Employee engagement drives core business outcomes. It is directly correlated with productivity, profitability, and employee retention.
We find that managers who are great coaches adopt 3 coaching strategies:
They make time for coaching. The best dedicate up to 60% of their calendar to coaching activities.
They narrow the focus of coaching to a few core skills.
They explain why they believe performance targets are reasonable.
For a more in depth discussion of improving managers' coaching capabilities, look here.
3. Engage much more deeply in employees’ personal development plans
It's no secret that many employees want to build their skills. But most employers are absent when and where they want to build them. Workers seek out self-directed learning at 5 times the rate of employer-directed learning. In self-directed learning, employees choose what, why, and how they learn. Coursera, Degreed, and Lynda.com, all self-directed platforms, have grown along with this demand.
Employers need to push for a seat at the employee’s development table. First, they need to be clear about the skills they want employees to develop. Then, they have to turn the conversation around and ask workers what they want to learn. They should also ask why they want to learn it. Employee motivations vary. Not all employees seek to learn skills to advance their careers or make more money. Many have intrinsic curiosity. Some want to set an example for their kids. Others want to contribute more to a key organizational challenge.
Beyond understanding what employees seek, employers have to provide new learning resources. When it comes to workforce learning, time is money, and quality trumps quantity. New technologies that provide personalized content can be effective at driving engagement. (Full disclosure, our Lume platform is one of these.) Frequent coaching conversations, that include discussion of employees learning goals, also help.
When skill development plateaus, organizations can get themselves unstuck. Start by clarifying goals and expectations for all roles and teams. Build the coaching skills of your manager corps. Get to know your employees' learning goals. Master all three, and your organization could push beyond that familiar skill plateau.
Frontline sales and customer service employees are the faces of their organizations. Customers base their opinions of a company largely on the interactions they have with these frontline employees, so their abilities and skill development are key to delivering a standout customer experience.
LumeWorks has spent hundreds of hours observing and assessing the skills of individuals in these high impact roles. One insight holds true across our engagements: At predictable points in employees’ tenure, skill levels begin to plateau. While this insight may seem intuitive, skill plateaus often occur even when there is plenty of room to grow in existing roles. Pushing past these development plateaus and fostering a continuous development mindset are critical to maximizing the potential of your most visible assets – your frontline employees.
Why does this happen and when should you expect it? Let’s explore the three stages of development we have found in entry-level frontline employees: Ramp-Up, Peak, and Plateau.
The first stage of skill development is the ramp-up period, which we define as the period of time until a new employee feels comfortable in a role. In frontline roles, ramp-up begins with onboarding and typically extends through the first 6 to 9 months on the job. This period is characterized by rapid development as employees learn the everyday responsibilities of the job and gain product and company specific knowledge. Speed to ramp-up, however, varies from person to person and is often a leading indicator of high performance. Those able to ramp-up more rapidly are eager to take on role responsibilities, demonstrate initiative, and utilize their team as learning resources.
As employees benefit from more experience in the role and gain more product- and company- specific knowledge, their performance will continue to increase post ramp-up. At around 10-12 months in the role, however, a typical sales or customer service employee will reach peak development. During peak development, most employees will be able to handle all the day-to-day responsibilities required and can handle common customer issues. Top performers will also have gained expertise in at least one particular product or aspect of the role. Less advanced team members rely on these employees to share information or problem-solve around challenges and roadblocks to accomplishing core job responsibilities.
After 13-16 months in a sales or support role, development begins to plateau, or, in some cases, even erodes as tenure increases. In the best case scenario, employees maintain their peak performance and continue to demonstrate intermediate to advanced proficiency in all role responsibilities. While there are a few outliers who plateau because they have learned all there is to know for their job, the vast majority of employees plateau when they are only at an intermediate level of proficiency in role-specific skills. Without deliberate action to address this occurrence, even top performers will start to find fewer ways to take on additional responsibility and improve the way they perform tasks.
So why does plateau happen and why do we care? We found two main causes behind skill development plateaus:
1. Top performers leaving role
Top performers are most likely to exit a role at or shortly after peak development as they get promoted off the team to a new role or leave the organization entirely. For their former teams, not only do they lose a key contributor to achieving metrics, but they also lose a positive influence and role model.
Throughout the three stages of development, top performers typically exhibit advanced skills earlier than middle and lower performers. These behaviors become best practices that top performers help instill in the rest of the team, aiding in the development of the team as a whole. The loss of a top performer can also impact the team’s mindset. Along with more advanced skills, top performers usually exhibit a growth mindset. As top performers exit the team, middle and lower performing employees at similar tenures will tend toward routine and fixed mindsets, two characteristics detrimental to continued development.
2. Employee burn out
Entry-level roles often include a high number of routine and predictable tasks and responsibilities. During the initial ramp-up period, exposure to similar questions and situations help employees quickly adapt to new responsibilities and environments. At peak development, employees have a strong ability to fulfill their responsibilities and feel pride in their competence in various tasks. After the 10-12 month mark, however, employees begin to feel there is little more to learn, and even the top performers begin to shift from a growth mindset to a fixed mindset. Job fatigue and boredom can begin to set in, causing both skill development and performance to plateau.
How well do your sales and support employees fit the skill development curve? How do you address these two obstacles to continued skill development? Stay tuned for the second part of our Tenure Analysis spotlight where we discuss interventions and solutions for overcoming this common human capital challenge.
This week I am presenting at the Close It Summit in Dallas, Texas. Presenters at the summit will highlight shifts that are happening in competency-based education, training, and hiring. Here, I’ll be highlighting what we’ve learned about workforce skills gaps and how organizations can take steps to correct them.
At a high level, LumeWorks helped create a skills index that identifies labor market challenges in seven different industries—the latest data reveals gaps in areas such as e-commerce skills in retail and mobile technology skills in hospitality. While businesses and the higher education grapple with industry-wide skills gaps, many individuals face their own skills gaps as well.
It is imperative that employers are able to assess skills gaps in their workforce and also on an individual level. Workers who fail to perform certain key functions of their jobs—or who fail to land jobs altogether—feel discouraged and disengaged. Regardless, these gaps are not static. A person can absolutely develop new skills. This is much easier and more satisfying when they are able to build new skills around existing areas of strength. The onus is on managers to assess their teams and provide actionable strengths-based solutions.
We’ve established a few tricks for assessment and coaching that help address these skill gaps within your team:
Focus on individuals. You can’t apply blanket coaching techniques or tips to your whole team. Consider what each person’s strengths and development needs and tailor coaching to these. In order to do this, however, managers need a framework that everyone understands. For many of our clients, we build this framework around both core job skills and common promotion pathways. We then create skill assessments and a dashboard, displaying the strengths and development areas for each employee. Frontline workers and managers can view their dashboards and be prompted to engage in coaching conversations on the tailored topics that will drive better learning.
Be disciplined. To be a successful coach, you need to be current. That means building regular coaching into your schedule. These critical conversations with members of your team cannot happen once or twice a year. In our experience, regular, targeted coaching conversations drive skill development at a much faster rate than traditional approaches like corporate e-learning or outside coursework.
Build a hypothesis, but probe to disprove it. We find that if a leader doesn’t have specific performance examples—real observations or numbers from which to draw specific insights about an employee’s performance—they’re more likely to put off a coaching conversation. The best managers use this evidence to create hypotheses about team members’ needs, then test these hypotheses by asking team members what they make of the data or observed behaviors. The best skill development happens when a manager and employee share an understanding of the context surrounding performance. Understanding the context doesn’t preclude a manager from giving tough feedback, but it makes it more likely that feedback will make a difference.
Create a culture of peer coaching. 70% of formal learning fails to stick due to lack of coaching reinforcement. Fostering an environment of peer coaching helps formal learning stick and helps managers scale impact. Many of our clients try this through internal social networks, but we find that the best performing organizations do not expect a healthy peer coaching culture to develop on its own. They take steps to deliberately create it, by providing frontline workers time away from core tasks to observe their peers, by structuring meetings around sessions led by frontline team members, and by suggesting coaching pairs or groups based on complementary skills sets.
Coaching helps you get a better return on investment from your employees and create the productive team you want and need. At the Close It Summit this week, my team and I will highlight a new software tool LumeWorks is building to drive better coaching and personalized learning for sales professionals. This mobile-first software will combine scenario-based assessment to gauge individual competence, CRM integration to map competence to performance, and personalized learning content to enable skill development and improved coaching.
Regardless of the tools you leverage, our experience has shown that managers that take the time to coach, and organizations that invest in coaching cultures, enjoy considerable returns on their investment of resources.
*Reposted from Terry McDonough’s LinkedIn on 10/4/2016