article | November 27, 2011
The #1 Way to Overcome the Biggest Obstacle to Resource Planning
Right-sizing your sales force involves three steps:
The third step of the process can be the most difficult to navigate because it must account for the “human factor”. In Step #3 – Implementing the New Size, a sales leader is faced with three options: Increase headcount, downsize or maintain the status quo. Two of the three options directly impact people and involve managing change within the sales force. Change is disruptive; mismanaging it can be the downfall of any implementation plan.
A successful implementation must include a Change Management Plan. In our work with clients, we conduct a “Change Readiness Assessment” to identify and list potential adoption challenges. It is important to recognize early on the probable reasons for resistance within the sales force, including upper management. A sales force resists the proposed change for various reasons. A successful Change Management Plan identifies those reasons early on and accounts for adoption challenges as well as a strategy to overcome them.
The basic premise of the Change Management Formula is that the effectiveness of your implementation equals the quality of the solution being implemented times the success of your effort to adopt the new solution.
Okay, let’s look at some examples of challenges to implementing changes to your Sales Force Size.
Growing your Sales Force
If you have determined that additional headcount is needed, the two most common sources of resistance stem from:
Compensation – For sales forces paid largely on commission, increased headcount will affect territory coverage. Salespeople will often be required to give up accounts to expansion territories, potentially affecting their compensation. In this case, formulating a strategy to address potential resistance is critical. One strategy is to present the sales force with objective and quantifiable business criteria for territory size early on in the process. Expansion decisions based on consistent criteria are more likely to be perceived as uniformly fair. Another strategy is to design a temporary transition compensation plan that keeps salespeople whole for a defined period following the expansion.
Span of Control – Adding resources requires recruiting and training of new salespeople, adding significantly to sales manager workload. In addition to their coaching and selling responsibilities, a sales manager is tasked with searching and onboarding new talent. In this scenario, it is vital to keep the sales force span of control (number of reps that report to a sales manager) at a reasonable level. Best practices would dictate a maximum 12:1 ratio. If this is not possible, make sure to leverage external resources and/or internal support programs to assist the sales managers with hiring and training responsibilities.
Key Takeaway: Changes to your sales force size are inevitable. To ensure success, implement a change management strategy where you identify early on the potential sources of resistance and craft strategies to mitigate their impact on implementation. Remember Effectiveness = Quality x Adoption.
What are some of your biggest challenges faced when implementing change, and how did you deal with it?
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A Business Strategy Consulting Company
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Amsterdam, The Netherlands