The Big Restructuring

I am starting to notice a pattern here.  As we talk to the ever-growing group of users, I am often asked what kind of “reports and dashboards” can you produce?  Perhaps they ask for these static views of their data because that is what they are used to.  Or maybe they are hoping to take the data deluge and turn it into something that is manageable.  Regardless, what they get carries inherent latency and may well be out of synch with the current situation.

We have also observed that customers are spending significant sums of money to improve the performance and effectiveness of their sales and channel operations on top of the significant investment they make in the sales cloud with  Sales intelligence tools, compensation and commission management tools like, special sales skills training programs.  The list goes on and the $$$ go up and up.  Yet, we learn that most of these prospects confirm what is reported in the industry press that sales productivity remains a huge challenge to profitability at most companies. The Bridge Group reports that average quota achievement for sales reps remains stuck in the low 50% range.

These are typical of the results that I saw when running Mercury Interactive back in the early 2000s.  And we had one of the best sales forces in the software industry.  Most of our VC friends that look at our business model tell us to factor in 60% achievement when determining our customer acquisition costs.  Add to that the fact that most well-run sales machines bake in 25%+ turnover into their sales recruiting models and it’s no surprise to learn of the drag on profitability that comes from lagging sales productivity.  And this is AFTER spending all this money on all these new tools, programs and skills uplifting activities.  What gives?

Nothing has really changed in terms of how organizations connect with what is going on in their marketplace of customers from what we observe of our clients in trial or otherwise evaluating Forecast 360 as a new tool to add to their sales performance management arsenal.

Stateless data that is consumed using the same old methods and tools.  Limited collaboration and an inability to separate between what some of our trial participants call the anecdotal forecast and the real forecast  To track, measure and understand these forecasts, salesforce customers continue to rely on old desktop productivity tools like Excel spreadsheets.  These users have tried to make up for the shortcomings of the spreadsheet by buying a collection of Business Intelligence tools that provide them with those pretty reports and graphs we mentioned at the outset.  Measuring data in a static process with lots of latency and in a stateless form doesn’t do much to bring new insights to the makeup of the forecast.

Changing your organization’s information metabolism is critical to improving the productivity of your sales teams.  I love this concept of thinking of your company as an organism that has to adapt if it want to realize the benefits of continuous improvement.  These organization must speed up the ability to learn what is going on with their customers and prospects.  Get the latency out of the system dive into the opportunities that make up the forecast and discuss them in a collaborative and interactive environment.  Enrich the data with insights that afford the team to measure the forecast and apply the collective intelligence of the organization to understanding the forecast.  These ideas are presented in a penetrating interview with Erik Brynjolfsson of the MIT Sloan School of Management from the monthly magazine published by the school.

Bryunjolfsson is a big believer in restructuring the traditional company organism from analog form into a digital business.  We have all these wonderful data stores like the Sales Cloud from, chock full of interesting data.  But you need the tools to track, measure and analyze that data and remove the latency inherent to any data sitting in a silo.  The goal is to create what he callsactionable knowledge that the organization can metabolize, share, and replicate all for the purpose of enabling innovation.  Key to the enabling process is his conviction that people must be trained and ready to embrace new roles and responsibilities to doing the measuring and gain the insights.

Bringing this back to the challenge of sales productivity, we think of the sales forecast as something that can be constructed and tested.  Yet, we continue to adhere to the old principal of a sales rep “submitting” his forecast as if he is the only person somehow qualified to sort through all of the information and conclude what customers will buy how much and when.  No wonder we remain stuck at such low levels of quota achievement.

Using the organization’s collective intelligence enriched from the metabolizing of precious market and customer information is a fresh approach to building and driving a company’s sales forecast.  Collaboration is critical to this new approach and enabling that interaction together with live data that is actionable is the breakthrough that Forecast 360 brings.  But we need managers and sales ops people that can bring the critical insights of the marketplace they have learned over the years.  What’s key here is freeing them of the shackles that limit their contribution today.

Many of the sales ops people we meet in our trials know as much or more about the mix of opportunities that represent the forecast than anybody else on the team.  Yet, their jobs continue to be relegated to that of data collector, cleanser, and validator.  Bryunjolfsson of MIT encourages digital businesses to leverage this in depth business knowledge and combine it with today’s digital tools to enable these people to take on a more central role in mapping the best path to making the sales target.  Sorting the huge pool of opportunities for the best mix and aligning that mix with the sales resources in the field is a whole new approach to driving the number.  Stop stove-piping these opportunities and hoping that the sales rep has it right.  Centralize the management of the opportunity mix and then decentralize the chase through the best alignment of sales resources.

It’s time to view the sales forecast as a series of experiments designed by collaborative teams of sales execs and their reps and orchestrated through the insights of the sales ops team.  Putting actionable knowledge at their fingertips is possible with today’s digital tools like Forecast 360.  Bust up the old paradigm of push sales forecasting using old spreadsheet technology and static BI tools and move to a dynamic forecasting process that brings teams together to work to the target speeding the analysis and accelerating the metabolism of key data from the marketplace of customers and prospects.  And watch your sales productivity go up and your profits grow.

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