Sales Compensation as a Change Management Tool Fuels Success
Michelle Seger, Global Sales Strategy & Change Management Leader, SalesGlobe
It can start with a whisper: We’re merging… our sales comp is down the drain.
When dramatic change occurs within a company, like a merger or acquisition, a vacuum of communication from leadership will be filled with rumor. One of the most common: an acquisition depletes an organization’s resources so much that staff cuts will be necessary. In reality, human capital is essential to organizational success, and a significant asset in a merger or company purchase. So, when should employees start hearing about organizational change?
Now. As CEO it’s important that you communicate as much as possible or those rumors will run rampant.
No matter where your company is in a major transition, your team members need to be in the loop quickly, or you’ll lose them. Lack of communication around significant company change is a costly mistake that can be avoided with core change management strategies.
In a rapidly changing business environment, the CEO and management team rarely have all the answers or the (legal) ability to share them. If you can’t tell details of “how” then share the “why.” What is the mission of a merger? Who are the key personnel who will bring the entities together? It may feel strange to communicate partial messages, but waiting too long to let employees know what’s happening at their company makes churn and attrition inevitable. Although the finish line may not yet be in sight, team members should see the intended route – a road map for change - and the steps it’ll take to get there.
Because sales can’t take a break while companies merge, the sales strategy and incentive/compensation plans must be addressed rapidly in a way that feels transparent and inclusive to ensure retention of talent.
Take the Cultural Temperature
What are your sales team’s pain points? What do they need to be successful? How do they want to be rewarded? As CEO, you should ask questions that result in these answers at the start of a change management process, through surveys and one-on-one interviews. Find out how employees feel about pay, fairness of total target compensation, whether roles are aligned with incentive plans, and whether team members understand sales strategy and expectations for achievement.
Learning the differences/similarities, issues/opportunities within Company A and Company B is necessary for becoming one company. The findings help you and your leaders determine how to leverage strengths and shore up deficiencies, as well as learn what employees believe is essential to their ability to succeed. The message to employees in this process is that leadership is eager to hear what’s important to them, therefore making them active participants in the transition.
Two companies may become one on paper, but a purchase or merger means there are now two different sales teams with differing cultures, products, titles, territory maps and go-to-market strategies under one roof. It may take a while to determine which elements will remain the same and what will be different, but talent assessment is a key starting point.
Do you have the right offering for your target market? Do you have the right sales process to meet goals? Do your salespeople have the right experience and skills to be successful in the new company? Alignment should be communicated as the goal, with assessments determining that everyone is placed in the best role for their intended success. If people are to be impacted negatively, make those adjustments swiftly, with management accessible for sharing information and answering questions. Direct managers to communicate in real time with as much information as possible, so that top talent and crucial contributors don’t leave due to fear of the unknown within the company.
Do you know the most influential sales leaders within your organization? Do you know the skeptics who resist change? If not, they will surface during staff surveys and interviews or through manager discussions. As CEO you should ensure these sales managers come to the table as part of discussions about change, including compensation, incentives, and cultural assets.
It takes longer to reach consensus when including multiple voices because each will have differing viewpoints and opinions, but the ROI is more than worth the investment of time. As plans take shape, these key architects can become change advocates with the ability to explain to peers and direct reports why new approaches are being used and what the upside will be for employees. This method ensures there are no surprises, again using the principle that some information is far better than none. Continuous sharing of information from the CEO to supervisors to peers and direct reports creates transparency and erases concerns that leaders are making decisions without consulting the front lines.
Data, performance and analytics don’t lie. Using the information of sales performance and quota achievement, alongside findings from employee surveys and interviews, sales managers and their teams can understand how changes to sales structure and compensation can solve problems they’re experiencing. Contributing to solutions and achieving buy-in of sales team members shows them that they’re not being disabled by change, but rather enabled to succeed in a new sales environment.
Communicate Through Compensation
When done right, your sales compensation tool should clearly outline roles, responsibilities, and the mission of the organization. There should be one common plan for the entire sales team with sales roles well defined and aligned with executive level goals and company vision. Each salesperson needs to easily understand what they’ll make on a deal, the path to achieve each performance level and how performance will be measured. Most importantly, quota and rewards should be in line with marketplace opportunities, appropriate for each role, motivational, and attainable.
A highly successful model for creating compensation plan links pay and performance, aligns team roles with financial goals, and focuses on measurable, attainable results. Plans developed in this way are extremely effective communication tools because they cover the who, what, when, where and why for sales. They provide everything a team member needs to know about the direction of the company and how achievement of their goals benefits both the organization and themselves.
Continuous communication is the hallmark of quantifiable change management results. Without communication from key leadership around organizational goals, compensation and incentives, sales can’t effectively propel growth and profit.