Failures in designing and implementing the annual compensation plans happened year after year for way too long. New programs fell far short of goals in part because no one could measure, collect and analyze the information required to calculate commissions accurately. The negative impact on sales folks included frustration after closing a sale since they had no idea of commission due. And when correct amounts never arrived in their checks, they knew that both the estimated statements and payments were invariably wrong. Wasted time spent wrangling over mistaken bonus reports was multiplied by exceptionally negative effects on morale that stifled positive incentives to sell more. As anyone has to predict, sales folks regularly failed to follow up on promises made to customers or prospects, because no one could properly identify and credit sales folks if they did sell anything.
Year after year the company had to routinely provide the sales force with unearned bonus and regular payments that ran up sales costs and weakened incentive programs that all contributed to regular shortfalls from sales forecasts and profit projections.
On the customer side the lack of sales follow-up caused customers to regularly fall short on their employee-participation numbers of products sold and used in order to reach pricing thresholds, leading to non-competitive pricing and dissatisfied customers.
Sustained Advantage planned and facilitated a three-day meeting using Language of Value with ValuBuild methodology that solved the compensation problems and introduced a successful compensation program for the first time in a decade. Plans for the meeting included a robust mix of representatives from departments that impacted outcomes including sales, compensation design, finance, information systems and sales support. We facilitated the assembled group through multiple exercises that forced them to abandon entrenched functional perspectives and unite around a new simple workable design that could be implemented within 120 days using existing capabilities. If this requirement could not be met and satisfied then the option was eliminated.
Based on a stringent commitment to this new guiding principle of simplicity, the new program was successfully planned, created and implemented on-time with the resources currently available. Obstacles that had been viewed as insurmountable were overcome using collaboration and innovation.
The best news followed when this dedicated compensation design team was applauded at the annual regional sales meetings in stark contrast to their usual negative reception of boos and hisses. Sales performance was measured as completed, increasing the ability to partner with customers and fulfill commitments and achieve goals. The initial positive results enabled top level leaders to commit additional resources for improving automation and efficiency in the support systems.