There are basically two types of sales cultures: results based and performance based. When I ask sales leaders to describe their sales cultures most will say they have a results based sales culture. I find that sales leaders and managers adamantly proclaim allegiance to a results culture over a performance culture.
As a performance improvement specialist and strong proponent of a performance based sales culture this made me curious. I decided to dig into the differences of the two sales cultures* in order to understand sales leaders’ bias.
Characteristics of a Results Based Sales Culture
In a true results based sales culture the sales person assumes the risk for achieving sales success. So the company hires well trained and experienced sales people with proven track records.
Additional characteristics include:
- The sales person is the best judge of the sales process and activities necessary for success.
- Achieving the annual sales goal is the only measure of success which represents built in accountability.
- Sales performance determines compensation.
- Sales person motivation is extrinsically based.
- There is little to no investment in sales training or education.
- We may refer to this type of sales person as a Gunslinger.
The results based sales culture takes a short term view of the company’s well being by measuring success in annual increments. It is a culture that is appropriate when selling high ticket products and services. And it’s especially appropriate when the products and services require finesse and individuality to complete the sale.
Disadvantages of the results based sales culture include:
- Measuring success is a “rear-view mirror” exercise – too late to make adjustments
- The sales person alone is accountable for reaching the sales target
- Failure to achieve success results in termination
For comparison, let’s take a look at the performance based sales culture.
Characteristics of a Performance Based Sales Culture
Contrary to the results based culture, in a performance based sales culture the company and the sales person share the risk. The thinking is that we (the company) have evidence that prioritizing certain activities and following established best practices insures a path to success. And further, we are investing in your success by providing training, education, and coaching.
Additional characteristics include:
- A performance based sales culture represents a long term view of the company’s growth and well being which is tied to developing people.
- Non selling activities are important and included in compensation.
- The company and sales leaders understand the best activities for success.
- Both the sales person and company share accountability for success.
- Sales are often a team event.
- We may refer to this sales person as a Loyalist.
Disadvantages of a performance based sales culture include:
- It can be difficult to measure activity proficiency and effectiveness
- Sales person job satisfaction relies on intrinsic motivation – e.g. job well done rather than just money
- It requires more management scrutiny and engagement
- This approach requires investment in developing people
In summary, there are advantages and disadvantages to both culture types. And there is a place for both. But, the bigger problem I encounter is that sales leaders often cherry pick elements from both when it suits them and that is a problem.
The Problem of Straddling the Sales Culture Fence
Often, when a sales person fails to reach quota, sales leaders of results based cultures cite reasons outside of the sales person’s control as the culprit. Reasons such as lack of training, or poor territory, and lack of support insulate the sales person and allow the manager to avoid termination. After all, firing a sales person and starting over is too painful. Who can blame the sales manager for taking the path of least resistance? But the sales manager who says one thing and does another is only setting himself up for failure. The sales team is sure to take advantage of this weakness.
Another prevailing problem is that sales leaders and managers may operate under the mistaken notion that a performance based sales culture does not prioritize results – but it most certainly does! The difference is in how to achieve results. A hybrid culture could be the solution.
The Solution: The Accountable Sales Culture
Most companies’ sales organizations combine elements of both cultures to create a hybrid environment. This makes sense since today’s sales organizations are often responsible for selling complex solutions, operate in complex selling environments, and employ team selling routinely. Sales managers appreciate the straight-forward accountability of a results culture, but attempting to enforce its simple model in a complex performance environment is an unfulfilling quest.
I propose ‘The Accountable Sales Culture’ as the solution. Here is what it would look like.
Example of Sales Manager’s accountabilities:
- Achieving financial sales goals
- Forecasting sales accurately
- Conducting weekly team strategy meetings
- Scheduling monthly one-on-one coaching meetings
- Observing and evaluating sales performance in the field
- Identifying and ranking high impact work products
- Setting quality standards for high impact work products
- Providing developmental opportunities
A sales manager’s most important work product is a high performing sales team.Mitzie Adams
Example of Sales Person’s accountabilities:
- Achieving sales quota
- Producing high quality, high impact work products
- Demonstrating skill proficiency and progression, such as:
- Articulating value propositions
- Presenting solutions
- Writing proposals
- Demonstrating products
- Forecasting opportunities accurately
- Following established best practices and processes
- Prioritizing high value tasks
- Maintaining a viable and healthy sales pipeline
Responsibility does not equal accountability
Sales leaders and managers may say that they are already responsible for these duties and tasks, but responsibility does not equal accountability! I’ve seen job descriptions with laundry lists of responsibilities that never translate to real accountability.
I maintain that sales leaders and managers have the most visible and difficult job in the company. They are heroes when their team is successful and they are collateral damage when the team fails. It is in the sales leader’s best interest to implement an Accountable Sales Culture that benefits both sales leadership and sales people, removes obstacles to success, and improves sales performance.
*My source for the sales culture characteristics is, The Complete Guide to Accelerating Sales Force Performance, by Andris Zoltners, Prabhakant Sinha, and Greggor A. Zoltners of ZS Associates.