Sales Performance Management Best Practices Blog

Is your Sales Performance Management process earthquake proof?

Posted by Jerry Hegarty on Fri, Sep 6, 2013 @ 10:09 AM

While reading a science article recently focused on the way Blue Muscles attach themselves to rocks and how this can be applied to earthquake proofing buildings, I was stuck by how this related to sales compensation. The core insight gleaned form the research was the need to combine rigidity with flexibility in order to withstand the different types of forces encountered in nature, including earthquakes.  Being from New England myself, I can attest to how hard it is to separate a blue muscle from a rock – next to impossible.Blue Muscle 1

Well, the following comment from within this article resonated profoundly with me as it could have been taken from one of those discussions we were having during the start-up of NetCommissions as we were broadly outlining the goals of the solution. At the time we were reflecting on the reality that sales strategy and the resulting compensation plans that reward the execution of that strategy differ so much from company to company. Additionally, there are times such as a company merger or a significant market shift, when you need to be able to 'change on a dime' and with little time completely overhaul your Sales Performance Management process.

"If you're an engineer, you're trying to fix things very rigidly," Markus Buehler, professor of civil and environmental engineering at MIT, told NBC News. "But nature has taught us here that to make things resilient in the long term, there needs [to be] a flexible structure."

Well that’s interesting, but what does this have to Sales Compensation? Great insight can be found when synthesizing concepts from entirely different domains and it struck me that these same concepts were core to the approach we took in building out the NetCommissions Sales Performance Management Platform, striking the correct balance between rigidity and flexibility was a core goal of ours from day one and is one of the main drivers of both the scalability of the solution as well as its usability.

The benefits of some rigidity and structure are too obvious to be ignored. When it comes to the sales compensation system design, a fixed structure drives the build out of functionality that is mature and tuned to the business user. Instead of a blank page every time the user logs in, there is functionality supporting a repeatable process that are easy to navigate and understand. Sales comp plans can leverage structure in a way that makes applying them to a large enterprise very scalable.

Flexibility is by far the more difficult dimension to incorporate but when done right can make all the difference in the world and truly position your investment in sales compensation automation to be one that passes the test of time. Let’s face it, most sales comp solutions out there can calculate commissions for a very basic plan correctly, some can even report those results clearly and securely to your sales team. But what are you going to do when you need to incorporate wholesale changes to core sales measures, credit rules, data feeds, complete new hierarchies, reports, plan rates & ranges, etc.

The dirty little secret of the SPM marketplace (that rarely comes up during product evaluations and selections) is that often the only way to incorporate the flexibility into an implemented solution is by bringing in very expensive ($$) Professional Service resources with deep IT and programmer skills to bridge the gap. If you are in the process of evaluating a solution, the percentage of revenue a potential vendor derives from professional services versus license revenue may tip you off to the real flexibility of the solution. You may find the answer to this quite surprising.

Has your core functionality been designed with enough structure to be easy to use but with enough flexibility for the average business user to make changes quickly and efficiently? Beyond that, is the platform flexible enough for you to incorporate customized workflows and functionality that may be entirely unique to your sales process instead of forcing you to run these processes outside the system with spreadsheet level technology or some other workaround?

Blue Muscle 2

Clearly, the ability to balance flexibility with rigidity is core to scalability and usability of your Sales Performance Management systems and process. As the dual anchoring systems of the Blue Muscle illustrate, finding this correct balance is key to making sure your Sales Performance Management process can stand the test of time and is something we take very seriously here at NetCommissions.





NetCommissions Sales Perfomance Management

Topics: Sales Comp Plan Fundamentals, EVP/Sales Leader, CTO, CFO/Finance Leader, Sales Compensation Professional, CEO, Human Resources, Sales Professional