Each week, we will highlight one of BSC’s Top Ten Tips from our acclaimed Design Guide to Success. To download the full guide, click on to the Articles page.
3. Build the Right Teams
The sales compensation assessment and design process embodies the ultimate cross-functional team effort. It requires multiple participants, involves essential stakeholders, and can become unwieldy if participation, roles and commitments are not clear. Ideal processes include a design team responsible for reviewing all inputs and crafting design recommendations, as well as an approval team responsible for testing those recommendations and ultimately signing-off on final designs. Successful outcomes typically heed the following advice:
- Involve the right people on the design team. An effective design process ensures the design team represents the organization’s needs and its various stakeholders well. They need to be informed, should demonstrate good judgment, and must be highly engaged. They also need to be respected; recommendations from a design team with respected members are much more likely to be subsequently respected by executives, not to mention salespeople. Salespeople, in particular, will look at the design team membership and the sellers need to trust the participants. Design teams normally include representatives from sales, human resources, sales operations, finance, and IT/systems.
- Involve decision makers early and clearly. Senior executives normally end up approving the plans, and if you want to avoid late-in-the-game surprises, their perspectives must be factored in early. Bottom-line, the design team needs to understand what they want the plans to support or what principles matter to them. Of equal importance, the approving parties need to give credence and authority to the representatives on the design team. That is not to say the approvers need to follow every recommendation from the design team – indeed, that would make the design team the approving team – yet the design team members and process must be considered important and their recommendations supported more than vetoed. The decision makers need to give them their charter and mandate. We cover this key topic again later.
- Separate design efforts where it makes sense. In today’s complex multi-divisional organizations, a perception often exists that all groups need to receive equal attention or have similar needs. In many cases, that is simply not true. If one division is undergoing more strategic changes while others are remaining more status quo, the design process and approach can certainly vary in focus. Indeed, exerting limited resources on the groups or sales team with the greatest needs and opportunities just makes good sense. We often separate groups into high, medium, and low touch in terms of need and focus. While some low touch groups may bristle, particularly if they feel like the red-headed step child (no offense to step children or Gingers), most will be thankful to not exert unnecessary time and energy if a need doesn’t exist. They’ll thank you, and you’ll thank us for this reality check.