In the absence of a lot of industry news, this week has flown by for me personally. The first part of the week was spent finishing up and submitting my presentation for the upcoming WorldatWork Spotlight on Sales Compensation event. I’ll be speaking on the Sales Performance Management Market and on Vendor selection. With such a dynamic and rapidly evolving space I wanted to present a different way of thinking about the technology solutions available and I think I succeeded. For those of you attending the conference I hope you can find the time to stop by and participate in the discussion. For those of you that aren’t able to attend I’ll share the most well received ideas shortly afterwards.
The rest of the week was spent speaking with clients (and perspective clients). This week a common theme I heard was cost - How to drive cost out of the administration of compensation? To me the answer is not to cut costs per se but to relentlessly drive economic value to the organization by better utilization of human capital, technology, and the optimization and where applicable the automation of processes. Today I want to quickly touch on the human capital side of the equation.
To achieve cost-cutting measures it rarely makes sense to arbitrarily cut heads in the sales compensation administration department. The focus should be on changing the department from a cost-center to a center of excellence that adds value back to the organization. Which leads to the question – Can compensation administration organizations be differentiated? Is there a vast difference between the average and market leading organizations? Our experience says yes - It is just not enough to produce accurate compensation payments in a timely manner and provide some reporting to the field. This level of performance is not even average and unfortunately I still see organizations that cannot execute on these table stake activities (note – even the poorest performers shouldn’t lose hope!).
Now envision a market-leading organization where the self sufficient compensation team delivers excellence in the above activities and proactively evaluates effectiveness of the compensation program and delivers improvements. An organization where a whole host of reports, dashboards, and analytics are made available for all compensation stakeholders – Finance, Field Sales, Sales Management, and Executives. An organization where when sales would like to make a change to the compensation program or introduce a short-term incentive the questions are not, how long will it take to code and how much will it cost to do so?, the questions are more along the lines of, “How would you like to measure the effectiveness of the change?” How about a compensation administration team that can support the quota setting and territory planning activities as well as administer disputes but more importantly systematically drive errors out of the process to prevent disputes from happening in the first place? These are just a few example of what high-functioning teams are out there doing today.
To move from the organization of ineffectiveness and inefficiency where the question is how many heads to cut to an organization of the future that adds value takes significant vision, leadership, and persistency. To achieve this transformation take heart in knowing that the roadmap to success already exists and the payoff in terms ROI is there for the taking.
For those in the states, hope you have a happy and safe labor day weekend.
For the most current up to date Sales Performance Management news please follow me at https://twitter.com/SPMconsulting
No comments:
Post a Comment