Why do we see so little HR managers in executive committees?
By Pascal Persyn on December 17, 2009 @ 14:21
0 Comments | Permalink | Subscribe to e-mail alerts
Tags: , change management, HR policies, Leadership, value chain alignment, walk the talk
I regularly hear HR managers complain about the lack of impact they have on corporate decisions. That they’re not taken seriously. Being informed way too late of decisions to act pro-actively. That they should be part of the executive committee because people are the most important assets of the company. Could it be that HR is stuck in his own theories and all together are enclosed in their own HR living environment?
I see 3 reasons which I will support by real life examples:
- Many lack the necessary business insight to serve as a sounding board for line management. Therefore they behave as “prescribers” to questions from line management. Yey these questions are usually too symptomatic due to the daily ins and outs involvement of managers. A good example is a sales manager asking for closing skills training because of a too low hit-rate and/or decision dates continuously shifting over time. Result a closing skills training is being organized. Yet a lack of closing skills is in less then 5% the real cause of the mentioned problems. The solution should have been HR offering to analyze the root cause and to propose solutions with a lasting impact. This of course is only viable if HR is taken seriously thanks to their business insights.
- Secondly, I see HR departments with new, good in itself, theories and plans that are too heavy and difficult to be implemented on top of the daily work that unfortunately does not stop because of a change process. This in turn leads to frustration in HR departments because they get too little involvement of line management to implement the necessary changes. These projects are usually not enough adapted and pragmatic to the real world which leads to quite large resistance. This in turn leads to a too low adoption rate and results quickly fading out. A good example is some of the competence and growth/evaluation practices and programs put in place. Heavy bureaucratic processes with formalized timing and reporting from managers to HR. Automated in user unfriendly intranets. Seldom based on simple deliverables and a common language which improves day to day communication between manager and employee. Let alone creating an environment stimulating people to give the best of themselves in order to create a chain of actions leading to optimized business results.
- HR does too little effort to understand and create insights on management level in cross departmental issues and linkages. Their distance to the daily ins and outs puts them in the ideal position for those insights and to share these with their colleagues. Of course, they simultaneously need to propose pragmatic solutions. A good example is a solution consisting of building sales ready deliverables combined with sales training, coaching and upgrading sales meetings to becoming an experience sharing platform. This solution require budgets from 3 departments in a lot of large organizations. Training from the HR budget, deliverables from marketing and coaching/consulting from the sales budget. I’ve seen very few HR people who took internal actions to launch such a project, let alone understanding the business need and internally sell such an integrated approach.
The above shows in a painfully obvious way that a lack of operational knowledge and insights on the one hand, and implementation focus on the other hand forms the basis of the problem.
Some possible actions which can resolve the problem:
Start by breaking down the HR walls. Translate theory into pragmatic solutions feasible even if it sounds like a bad idea from the theoretical point of view. This means that the broad and deep use of the skills and tools must get the upper hand on the theoretical appropriateness of the solution.
Focus on gaining more business insights through more time to spend in the workplace. Divide your time outside the company premises by not only networking and studying in HR circles but also spending a lot of time in broad management environments such as the vMA (management association in Flanders) to name only one. It will allow you improve your operational knowledge as well as being able to toss of your ideas and experience with line managers from other companies.
Only then will HR:
- sufficiently understand what really lives on the floor;
- get broad support from the staff and get surprised by the acceptance of their projects;
- asked to be part of the executive management team;
- and create lasting impact thanks to their efforts.
Current crisis: An opportunity for scalability
By Pascal Persyn on December 10, 2009 @ 15:41
0 Comments | Permalink | Subscribe to e-mail alerts
Tags: , adaptive capabilites, Corporate DNA, customer centric organisations, dynamic organisation, employee involvement, market share improvement, scalability
We have heard much in recent months about the need for anti-cyclical investment. Although I fully agree with that statement, is it incomprehensible to hear so little about “how to prepare yourself to not only survive this crisis but to become stronger then before”. Or the opportunity that exists during the crisis to gain market share and be ready to maintain that market share or even further increasing it once the economy picks up. The answer to both questions is to examine everything you do or plan to decide from the point of view of the impact on scalability.
First something about scalability. Scalable organizations are:
- End-to-end aligned: Streamline your value chain by having coherent bundled responsibilities. Written processes are kept to a minimum to keep the organisation adaptable and agile. This will help to make individual contributions to the goal clear to everyone. The increased involvement and insights will enable people to be creative and to contribute to the result in the most effective way. Doing the right things instead of doing things right. The best bundled responsibilities are those allowing you to quickly find new people on the job market because you take available combined competencies into consideration.
- Dynamic organizations: Endorsing a culture of facing the brutal facts, where people and not the processes are central. Ensuring that people focus on their contribution and not on their career (plan). Learning from and celebrating successes but also learning from mistakes being made. Being convinced that uncertainty is the only certainty in life.
- Thought leaders in their field: They strive to be different not better. They educate the market based on their differentiation so that prospects seek their leadership. Lead nurturing based on valuable content for the prospect is their way of promotion. Improving the value proposition for each of their served segments is what drives product development.
- Customer focused: The customer and the market are central in everything they say and do. The front-line organisation is based on buying readiness of individual involved people in the decision making process rather then an automated nexst step sales approach.
- above all Vision and DNA based: All of above is impossible to execute in case of DNA dilution. Don’t keep people on your staff whom are not DNA compliant not even if you consider their contribution or importance indispensable for the organization. This is where the blindness to future problems commence. Managment will end up managing people instead of their business.
The biggest advantage of ‘design for scalability” is that it works both in periods of growth and during recessions. Scalable organizations can more quickly adapt to their environment in both good and bad days. Every crisis forcing you to reduce headcount or reorganize the company is a unique moment of choice to increase your scalability. This means also having the courage to leave trodden paths. This implies not to:
- reduce your headcount by letting go of people with the cheapest severance package;
- cancel the simplest costs and investments such as training and educating people, change processes necessary for the long term, sales and marketing spending etc…
- put your best people on the biggest problem rather than on the largest opportunity;
- deviate from the long-term strategy thereby losing focus. Losing clarity throughout the entire organisation will be a consequence. Thus increasing the uncertainty resulting in paralysis;
- acquire companies when the market is on its top and everyone is bidding as if the sky is the limit.
but on the contrary:
- Cut inefficiencies grown over time;
- Continuously adapt to the changing circumstances without undermining the long term vision. Being vision focused;
- Transparent and timely communication;
- Putting DNA, people and competencies central in your organisation to avoid bureaucracy and maximize involvement.
Leaders and managers will no longer have an excuse to take resolute decisions improving the scalability of their organization once the economy is picking up.
This is the only way to maximize your potential!
How to improve your forecast accuracy?
By Pascal Persyn on November 28, 2009 @ 12:16
0 Comments | Permalink | Subscribe to e-mail alerts
Tags: , buying clock, buying funnel, forecast accuracy, forecast visibility, funnel management, sales funnel, Sales-Process
How to questions from readers and customers prompted me to write an add-on to my previous post on funnel management.
The first thing that has to be said is that few companies have changed their sales approach in an appreciable way over the last few decades. Yet buyers are seeking to buy and not to be sold to for over a decade.
I still see sales trainings and managers telling their sales and to look at the sales cycle and behave in an way that is inward looking. Sales force automation (SFA) and customer relation management systems (CRM) haven’t really helped to convert the front-line in an outward looking mode and helping people to buy from them instead of being sold to.
I was pleasantly surprised to see one of the outcomes of the 2009 sales conference in Miami where the buying cycle emerged as the new standard for funnel management. I trust this to be a stimulus for all the Perpetos customers bringing this into practice since 2005. But their is still a long way to go. It is indeed the best way to get subjectivity out of your funnel, yet it demands a mind-shift of the whole sales organisation and another way for management to coach and interact with their sales team. They all must learn to ask way more questions and ‘really’ try to understand what the customer is saying.
The principle is simple: Ask the customer questions which allows you to know the readiness to buy of each individual in the decision making unit (DMU), align them all so that they move through the buying cycle in a synchronised way and adapt your actions to it.
A couple of tips to improve your funnel management:
- Stop tracking and discussing sales steps and process. Start using readiness to buy phases based on reactions and answers to questions from each individual involved in the buying process. Ideally start using the Buying Clock. Using the time on the clock is an easy way for implementing a, consistent used, common language.
- Are we asking for and tracking the next step or are we engaging the sales rep to first decide on the next objective to facilitate the buying process on a project level before deciding what the next step should be, when and with whom? Do we track this in our funnel?
- Track the pain level of the customer by also knowing the impact of the challenges on the customer. Is their a compelling reason or an urgent need?
- Has your sales rep access to the decision maker? Is he continuously involved in the process and kept up to date by the sales rep?
- Is the go-live date the most important date we discuss with the customer? Is it a fixed date and why or can it easily be postponed? Do we know and are we tracking the go-live date?
- Has the customer actually confirmed your solution fit and did we postpone drafting the proposal until that moment?
- Split the weight % in 2 distinct ones: project%=what is the probability of the customer actually buying and win% = the probability of you winning the deal.
- Are you tracking the most important mandatory buying criteria and what is the perceived scoring of the customer compared to the competition? Do you discuss ways to influence these buying criteria?
Finally:
- Convert your weighted funnel in a scenario based funnel on which you coach the sales rep.
- Engage in vivid 1:1 discusions with sales to set a continuous improvement process in motion.
Your benefit and result: An accurate forecast with a highly improved visibility.
Funnel management: admitting a pain doesn’t mean buying
By Pascal Persyn on October 23, 2009 @ 16:50
2 Comments | Permalink | Subscribe to e-mail alerts
Tags: , customer focused organisation, funnel management, hit-rate and cost of sales improvement, pipeline management, sales performance
The basis of a good quality funnel is one which is based on prospect readiness to buy!
The most often used funnels nowadays are still based on subjective input from sales. It’s amazing to see how many managers are using such a funnel to predict revenue and use it as the basis for budget exercises. This is the funnel that most people use yet it is a very outdated model. This type of funnel is an artificial invention taking the eye away from the prospect and puts the focus on sales actions.
The fact that doing something is putting the opportunity on a given point in the funnel is a totally wrong assumption. The thinking is flood. You can give company and product presentations, demo’s, send proposals even when asked, etc without achieving anything. The question is am I doing something which corresponds with the readiness to buy?
Here are the biggest funnel mistakes:
- input based on subjective sales rep input. The gut feeling of sales people in terms of funnel management are seldom correct because:
- they are to closely involved to have an overall view
- most sales are to much influenced by the opinion of their ’sponsor’ and/or last sales action
- they have too little visibility on what’s happening at decision level
- not enough, if at all, contact with the ‘real’ decision makers
- individual forecast building by using a percentage win-rate on each of the opportunities. Most funnels at sales rep level and even on corporate level have to little opportunities at the same stage with too much variation in size
- defined by selling activities: performing activities is not necessarily moving the opportunity closer to a decision
- lack of common definitions
- imposed as a reporting tool and not as a day to day self-coaching tool: The funnel will never be up to date or based on careful thinking if it is not in a format, and incorporated in the way of working, which influences the agenda and behavior of the sales rep
- tracking and reviews based on must win deals resulting in starved pipelines and pushing salespeople to do the right things at the wrong time.
Helping management and the VP sales to more accurately predict the revenue is to convert the funnel into a buying funnel which tracks the readiness to buy of the opportunity. This is even more true in more complex sales with quit an amount of people involved in the decision taking. Because each of the involved people have their own agenda and readiness to buy which must be synchronized in order to move the opportunity closer to a decision in the quickest way possible.
The mental stages a buyer is going through:
These phases are universal and cultural independent.
- execution of existing solution and not interested in any information or offering in that area
- executuion and interested: something triggered the person to want to know more about something
- Field of Tension: Starts with an admitted pain which evolves over time into an urgent need. This results in the decision to buy something
- Market Research: The prospect goes out to the market to search for potential solutions and vendors
- Hesitation: This phase starts when the prospect thinks to be convinced to buy what from whom. At his point the focus shifts from looking to the benefits and advantages of acquiring the solution to all what can go wrong after having bought.
- Implementation: This is the period during which the solution is being implemented.
- Execution: The solution is in full use until the cycle starts all over again.
Perpetos has converted these phases into a 24 hour buying clock™.
Some of the reported results you acquire by this system are:
- a true shift towards customer focused thinking and acting
- an objective pipeline with a much better accuracy
- improved internal communication based on the hours of the clock
- lower cost of sales (i.e. less multiple people meetings because sales and pre-sales exactly determine when their presence is needed)
- improved hit rate
- more balanced pipeline
Let my know your experiences!
Managing uncertainty is the post-crisis challenge for leadership
By Pascal Persyn on October 15, 2009 @ 21:19
0 Comments | Permalink | Subscribe to e-mail alerts
Tags: , change management, DNA and corporate culture, Leadership, Motivation, stimulating creativity, Strategy execution
One of the much heard questions these days is: Will everything turn back to the pre-crisis situation or what will have changed?
Trying to create certainty by extrapolating a known past into a bright future has definitely proofed to create an illusion of predictability. Spreadsheet management as a way to do business planning has been a common practice for too long in too many companies. Optimal functioning and productivity of people has long been linked to the wrong assumption that people need certainty. The difficulty to break the ’status quo’ within companies, and definitely the political world, has supported this way of thinking. People prefer the known discomfort over the unknown future.
Seneca once wrote: “The greatest loss of time is delay and expectation, which depend upon the future. We let go the present, which we have in our power, and look forward to that which depends upon chance, and so relinquish a certainty for an uncertainty.” Yet uncertainty is the only certainty.
It is my conviction and experience that people are not afraid of change but are afraid of the unknown personal impact of the change. Too many leaders and managers are trying to sell certainty to overcome this. Yet many studies have proven over and over again that people need a certain level of discomfort to to stimulate creativity, productivity and focus.
The reason for all of this is the fact that their is no such thing as rational decision making. Dan Ariely (author of Predictably irrational) wrote the following in a recent Harvard business review: ‘Your company has been operating on the premise that people (customers, employees, managers) make logical decisions. It’s time to abandon this assumption”
Creating an environment of ‘balanced uncertainty’ is therefore the biggest challenge moving forward.
The following is key to success:
- Transparent communication whereas the truth can be said, problems and mistakes surfaced and discussed as soon as possible. Jim Collins already referred to this as facing the brutal facts;
- Building trust, thus building an environment where openness gets rewarded
- Avoid or get rid of a diluted corporate DNA
- Offering a realistic challenge in order to stimulate motivation, creativity and innovation
- and above all walk the talk
Are you ready to maximize the potential of your people?
