Unfortunately many sales leaders ignore market dynamics and focus primarily on cost and affordability when considering resource planning – see previous blog post for few popular but incomplete approaches.
A more complete approach to Sales Force Sizing includes the following four steps:
- Understanding your Organizational Environment
- Assessing the Current Size of the Sales Force
- Determine The Future Sizing
- Implementing the New Sizing Recommendations
Let’s take a deeper dive into Step #1, since this is the step most sales leaders skip when considering adding or cutting headcount.
Understanding your Organizational Environment
- Assess Business Lifecycle – All resource planning projects must start with assessing where your company, your product and your industry lies on the Business Lifecycle. Each follows the typical progression of Growth, Maturity & Decline. Understanding where you are in the lifecycle will impact how you deploy resources.
- Review Sales & Corporate Strategies – As the Sales Operating Plan, a company’s sales strategy must be aligned with its corporate strategy. For example, if the corporate strategy is focused on capturing market share within a specific vertical, the sales strategy must be structured to deploy resources accordingly.
- Document & Assess Sales Force Structure – Sales Force Size (headcount) and Sales Force Structure (Org Chart) are kissin’ cousins. Every resource planning project must account for how the sales force is structured. The output of a sizing exercise is number of reps and/or managers to add or cut. Whether you increase or decrease the size of your sales force, how it’s structured is critical to the success of implementation and execution.
- Understand Ability to Change – Nothing is more disruptive than changing the size of your sales force. To be successful it is critical to measure your company’s ability to adopt change. That is why Change Management is often the lynch pin to effectively implement any new initiative.
Key Takeaway: If your team isn’t hitting their number, perhaps you should consider if you’re deploying the right amount of resources into the market place. Right-sizing your sales force starts with a deep dive into understanding your organizational environment. Only then are you able to assess and determine the optimal headcount.