The Czar Report - Volume 5 Issue 1

Home Meet the Czar Management Training Business Consulting Seminars & Speaking Engagements Articles and Education Resources Coaching Services Contact Us		Volume V, Issue 1 • SECTION I –Setting Expectations that Work? • SECTION II – Mini Case • SECTION III – TIPS FROM THE CZAR • SECTION IV - ASK THE CZAR –     SECTION I –Setting Expectations that Work? Recently, I found myself in a seminar on Executive Compensation and frankly, since throughout my career I had a series of jobs that gave me extensive experience and knowledge in Executive Compensation, I was expecting the session to be a real chore for me. For those who do not know, or remember, at one point I was the Senior Vice President – Human Resources and Administration at IBM when Lou Gerstner took on the challenge of fixing a broken company.  Frankly, making certain that we completely reinvented the Executive Compensation system so that it would truly reward the behavior and results that Lou was looking for, was a crucial aspect of what I did during my tenure. So, suffice to say, I was looking forward to trying to find a way to be “called out of the seminar” for some crisis.                                                           Well, the crisis never came, so I found myself stuck listening to a rather basic, although well done, presentation on Executive Compensation.  As you might suspect, many times during the session, I found myself wandering off, but ironically, I also managed to listen just enough to find a nugget or two, which if nothing else, was good reinforcement. That said, there was one section of the presentation which got my attention, and which I want to share with you. The seminar had a rather strong focus on incentive compensation, pay for performance. The consultant, rather early in the seminar, started a discussion of the criteria required for effective goal setting and that is what got my attention. Frankly, his remarks were very consistent with not only my beliefs, but as you might expect, with my writings on the subject of Expectations. The key, however, to my getting interested was that he was looking at the subject with a slightly different focus, and I found that quite useful. The key to his focus was not on the goal so much as it was on the state of mind of the person being assigned the goal. In my writings, I have talked about the Assignment of the right person to the right job, but my focus was much more on the knowledge and skills of the individual. In this case the consultant made the very critical point that when it came to the goal, it was crucial that the individual actually could internalize that the goal was one that they felt fit them, rather than they fit the goal. This is not just a distinction without a difference. It is a rather powerful thought. The message here is that if the individual cannot get his head and heart into the goal, the goal has been given to the wrong person. No amount of understanding will ever get that person to be able to fully “accept the goal.” This connection, or identification, with the goal is perhaps the most powerful of factors. As an example, take a star salesperson, who has delivered sales goals consistently for 5 years, but who one day is charged with the responsibility of coaching another salesperson to achieve a similar performance record. This obviously sounds like a great idea. Having the best salesperson, spend time with a young, fresh, even high potential “rookie” certainly seems to be a wonderful way to leverage the skills of the best on the team. Indeed, it might be, but what if that star actually thinks that this “coaching assignment,” will weaken his ability to get his own sales up to the next level of excellence. If he cannot get energized and excited, it is conceivable than no amount of reward, psychic or financial, will motivate him to do the coaching. In this case, we may be putting the wrong person on the right goal. Worse, we might be losing a great salesman. Take another example, take yourself. Let’s assume that you are a leader/manager of an accounting department today, and your boss says, “I need you and your department to take on a whole new customer service function. And let’s further assume that you actually once managed a customer service function, and concluded that you were miserable when dealing with a bunch of complaining customers. On the other hand, your boss believes that in your accounting department role you and your staff need to recognize that the rest of the organization is your “customer” and hence you need to become more customer centric. It is hard to argue that point objectively. Internal customer concepts have been floating around staff management for a long time. So what is likely to happen? My guess is that you will delegate effectively all “customer contact” to your staff and will try to manage their activities without any real involvement by you in the process. There is nothing wrong with delegation, but if that delegation gives you the opportunity to avoid engagement on the process, there is little doubt in my mind that you will fail to build a culture of “customer service” for the internal users of your function. In short, you would be the wrong person for the goal. All of this is pretty easy to grasp, but where it gets tough, is when you have such a person working for you. What can you do? In all likelihood, you will have either come to the decision that this goal is critical, or somebody you worked for did. In either case, if your employee does not “buy-in,” your expectations of that person will be a source of frustration and probably failure. All of that may be true, but what can you do? I think that you have only a handful of choices, and none of them is very simple. First, you can try to convince the person, that is, to sell them on the importance and appropriateness of the goal, but that may be impossible. Secondly, you might be able to rework the goal to fit the person, but if there is a truly bad fit, that may be impossible as well. Third, you might just need to revisit the goal. That said if you have worked to set the goal, or worse, if your boss did, then it is going to be virtually impossible to see it differently. Tragically, in many instances, your only choice will be to change out the person. Now that might not mean fire, it could be to reassign to a different job, or it could mean a transfer to another department. The plain fact is, the final alternative could well be that you need to part ways with the employee. Here is where that message of love comes in; your love for that person may be the actual driving force for the change. It makes no sense to try to force somebody who is not right for the goal, to accept it, because in my view it would be almost inevitable that they will fall short, even if they have been a star performer on other roles before. It takes real; love to say, I am sorry, but this goal is mission critical, and I can tell that you are not right for this goal, and I can find no way for you to achieve in your current job if this does not become something you can be comfortable with. Top SECTION II – Mini Case Sylvia is a phenomenal salesperson. She had met or exceeded her sales targets each year for the last five years, and she just finished a record year again. Two weeks ago it was sales goal setting time, and Sylvia found out that her targeted sales goal was going to be 20% higher than the previous year. That is a big deal, because her incentive compensation is based on her getting significant commission % increases on all sales over the target. Her perspective is that, for her to reach the same level of income as last year, she needs to sell more units, and at a higher price. Her sales manager has said, “I understand that is true, but we need you to stretch more now that you have more experience and more customer relationships.” Sylvia simply thinks that is unfair and is talking of resigning.                                                                    The Analyst: If you have ever sold in a tight sales culture, or if you have ever been the manager of such a function, this situation is almost routine. The plain fact is, Sylvia has not “bought in.” This stretch goal does not have her buy in, not because she cannot identify with the goal, but that she simply does not believe that it is achievable. When goals are perceived as unachievable, I have virtually never seen them met. There have been exceptions, but if I do not think that a goal is either fair or reasonable, I am likely to either walk away from it entirely, or at best, give it a shot, but fully knowing that I cannot do it. This is a dilemma and there is no answer. Sales Managers everywhere are facing this challenge every day. Most force the issue by “selling” the person on how it can be done. Some bosses even succeed. Others will simply “cave in” and modify the goal. Many times the decision is based on an understanding of the person complaining. At other times, the boss will simply give in to avoid the conflict. In my view, the best solution is to find a compromise position that gives the salesperson a chance to negotiate the goal. There is something about negotiating that tends to leave the negotiators feeling good about the end result. In whatever strategy you use, make certain that everybody hears from you what happened, do not leave it to anybody else. Also, no matter what happens, as the boss, you cannot often “lose” a negotiation. Get that reputation, and you will be a soft touch for everybody, includi! ng all the rest of the staff. Top SECTION III – TIPS FROM THE CZAR Expectation Tips for anybody who is in the goal setting business: Never let a subordinate set the goal first. You need the opening statement. Try to get the subordinate to tell you what they think they can do but only after you have set the tone on challenges. Your staff needs to know that you will always be looking for stretch goals. The goal must always be relevant. Goals only get commitment when they are goals that impact the success of an organization. If the staff views the goal as a waste of time and energy, it will not be accomplished. It must be measurable either quantitatively or qualitatively. Be factual, and make certain that whatever you say, is fact based. The emotion about the goal will come out, so just let them vent. Make certain the goal is very clear and has carefully defined criteria for completion, time, date, cost, etc. No legitimate goal is insignificant. If the staff makes the goal, praise the success. Make certain that your compensation system truly does pay for performance. Rewarding failure will assure failure. As The Chapter in my book….An Organization Elicits the Behavior it Rewards. Not all rewards are money, but money is almost always a part of every system of rewards. Top SECTION IV – ASK THE CZAR – From Stanley:                           I am a new manager of a sales team responsible for selling large ticket technology equipment to business and I am having a great deal of difficulty with achieving my sales goals. I have been a very successful salesman selling this same equipment, so I really know how to do this. The team I have inherited is just not closing deals. There is an incentive program in place that has been very lucrative for me in the past and I simply cannot understand why they are not making every effort to achieve the goals. I do know that this problem has existed for some time, because the reason I was promoted was that I was selling almost twice as much as anybody else in the group. Worse, these people are all highly educated with almost all of them having at an MBA. I do know that many of them aspire to be General Managers, so it seems to me that they should be even more highly motivated to achieve their sales goals. What do you think is wrong, and what should I do? The-Czar: Obviously, I cannot tell for certain what the problem is, but there probably are a couple of more likely causes. The first is the most obvious, the staff may simply not have the knowledge and skills required to achieve the results. Without the core competency to achieve the results, they will continue to fail. I assume that you have already worked to determine their skills, and certainly hope that you have taken the time to do the training necessary to help them achieve. When our staff fails, we must always be certain to focus on training them. That can be hard work, but it is our core responsibility to Develop them to achieve the expected results. The second reason may be a bit less obvious, but it is conceivable that the staff simply does not have the ability to accept the goals. This acceptance is always essential to consistently achieve. It can be reflected in their inability to believe that the goal can be achieved. If they do not believe in the goal, they may attempt it, but will almost always fail. Another cause could be that they simply do not like their jobs, or said another way, they do not think that selling is their calling. This current sales job could be simply seen as a “stepping stone” to achieving that General Manager job. If there is any chance that your staff simply does not like selling, they will continue to fall short. It is clear that success is not all just hard work, it often comes from an inner excitement and enthusiasm that helps us to overcome the obstacles that stand before us. The reverse of that energy, is the enervating impact of a lack of enthusiasm. When we do not enjoy, or get excited, about our jobs, the expectations will always be at risk. The goals you are setting may be entirely achievable but if your staff does not have that “fire in the belly” they will not succeed. Selling, almost more than any other activity in the corporate world, requires a positive, enthusi! astic attitude. When we try to convince somebody to take an action, we need to have the advantage of belief and enthusiasm. If your staff does not see itself as a sales force, then they will never be truly successful in that capacity. Top
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