The butterfly effect in sales organizations
Sales organizations are complex entities, filled with moving parts. Customers, markets, products: all can shift at any moment. Simply staying aware of everything is a full-time job, let alone figuring out how to keep the business moving forward.
In my years in sales, I’ve run across many strategies for thinking about what we do when running a sales organization. I’ve recently encountered a novel approach to understanding an obstacle one often encounters when trying to keep a sales org on track.
It’s called the butterfly effect.
The butterfly effect, as you may remember from “Jurassic Park,” is a part of chaos theory. The basic idea is that small, almost imperceptible changes in one part of a complex system can produce huge, unexpected results elsewhere.
The classic example is of the butterfly that flaps its wings in China, causing tiny disturbances in the air that slowly swell and drift until they eventually produce a tornado in the Atlantic. It describes the cascading effect of a single decision, and how that decision can produce a host of unforeseen consequences.
What does this all have to do with sales? Well, a sales organization is a complex system. In any complex system, small changes can ripple outwards. (CLICK TO TWEET).
For example, let’s say you’re a sales leader and after evaluating your sales capacity, you decide to freeze headcount in the Northeast for 60 days.
Freezing headcount in a single region—that’s a local decision. Or is it? After all, freezing headcount ends up affecting your account coverage, because your reps may now have to cover different or larger territories, as they won’t have new reps coming in to split the coverage. Of course, if you change territories, you have to change quotas to match. And if you change quotas, you’ll be paying out different incentive plans. This means that your finance team will have to change its financial forecasts. Also, with fewer reps, you’ll have to reconsider the pipeline potential that could have been generated.
To account for all of these calculations, you have to change your sales forecasts. (And in many small- and mid-sized companies, if you miss your sales forecasts, you’re dead.) Changing your sales forecasts also means changing your company’s revenue plan.
These are big consequences, all coming from one small decision. That’s the butterfly effect. And if you’re a sales leader and you’re not on top of these multiple consequences, you’re be doing plenty of scrambling to catch up. (That’s in the best case. I won’t say what the worst case is.)
How to manage the butterflies
So, you might ask, are consequences of this sort inevitable? Is there any way to prevent these kinds of unexpected disruptions from occurring?
Well, according to chaos theory, the answer is an unfortunate no. That’s simply how complex systems work.
That said, although you may not be able to prevent effects like these from playing out, you can certainly prepare for them. How? By leveraging technology that gives you a view of your entire sales strategy, so you can track changes in real time and understand how they affect the strategy as a whole.
Even better, you can use technology with advanced modeling capabilities that let you model in advance how decisions anywhere—even tiny ones—can cascade throughout the sales plan.
To hear more about the butterfly effect and how the right sales solutions can help prepare for it, feel free to attend my headlining session at WorldatWork Spotlight on Sales Compensation, August 20-22 in Chicago. Or meet with us there to receive a free SONOS speaker.
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Topic: Sales Management