Cultural Preparation and Adoption of a New Sales Performance Management System Doesn’t Happen by Chance
by Susan Major
Originally published December 3, 2009
Unfortunately, there are many things we attempt for the first time that don’t go the way we want or expect. Take, for example, the first time we ride a bike with the training wheels off or eat with chopsticks. An incentive compensation system can be viewed in much the same way. The promises are great and the company often views implementing such a system as an easy win. Yet, the truth is a culture develops around the “process,” or the how and what people do to make things happen, and a sales performance management (SPM) project can hit a brick wall very quickly.
Understand Change Can Be a Scary ThingInitial expectations can often set an organization up for failure. Thoughts like this will be easy, everyone will love it, and our people don’t really care about any changes will quickly lead a project astray. Not everyone will love it. Regardless of expectations, human nature often leads to a preference for doing things “the old-fashioned way,” no matter how cumbersome.
Change is not always easy and can even be more difficult for some. Actually, in all the years I’ve been implementing incentive compensation management systems, I have yet to do one that could be described as easy. There are always little things in the process that trip us up, especially in a highly decentralized and manual process. Personal interpretations can go a long way to complicate things in the processing and calculation of commissions. And trust me, people do care, especially if you start messing with their paychecks.
The reality is that you should expect to deal with data issues, plan complexities and processing exceptions. Processes have developed over time and any change to them will create cultural shockwaves. Figure on any SPM project taking six months to two years for full cultural acceptance of the new system and processes. You will find individuals who will want to throw every conceivable roadblock they can find in the way. You will also find, however, that if you can convince these cultural sticklers, they will turn into your biggest fans. And, they may help you sell the system to the rest of the organization.
Don’t Bite Off More than You Can ChewIf you are thinking this is a good opportunity to streamline your compensation plans, think again. Depending on your processes and environment, it can take years to streamline these plans. Why? Because you will find that there will be push back to make exceptions, keep exceptions and ease people into the new plan. From a cultural perspective, there tends to be plenty of compromise in the changing of plans, unless there is a strict legal or compliance issue that needs to be addressed.
As mentioned earlier, you can plan on as long as a two year timeline in gaining organizational acceptance for your new SPM system and process. The six month to two year span depends on the flexibility of your end users, and the attitude of the management team and sales executives. If the sales executives can talk up the system and sell the sales organization on it, things will run smoother.
Be Honest with Yourself and Your PeopleLet me clarify one misconception – implementing an SPM system does not guarantee that you will be able to immediately downsize your compensation group – especially if you currently have a decentralized process in place and the groups have different interpretations of the plans. There is often a learning curve involved with a new system and its procedures or processes. If you are decentralized and there are different interpretations of the plans, then the learning curve is increased for those that will manage the system. They need to learn all the different ways that plans have been interpreted.
And please, never lie to your people (i.e., telling them that there will be no layoffs). Somehow employees always know when the management team is lying to them. Play it safe and tell them the truth about what you expect from them and from the system. They are more likely to accept the new SPM system if they know the management team is working for the betterment of their jobs and the organization.
It May Get Worse before it Gets BetterExpect resistance to the implementation of a new process and/or system. If you currently have a highly intensive manual system that is easy to manipulate, then your resistance level will be greater. There will be an initial increase in time as your sales people do a lot of “shadow accounting” until they trust the system, and your administrative staff works through the learning curve and data issues. Plan on having data issues and expect that they will not necessarily be fixed on the day your system goes live. A system can only do what it is programmed and configured to do and unfortunately, there are some things that can’t be programmed or configured. It needs objective data to deal with – it cannot sense moods, or compensate based on this. Your staff will need to commit time and energy into the implementation and adoption of a new SPM system in order to reap its rewards.
In SummaryIt is best to take some time at the onset of the process to start preparing your organization for the cultural change. Get them involved early on, and prepare your management team to sell the idea internally. Be ready for resistance and push back. Cultural acceptance can take a long time, so try not to introduce other changes that might derail your implementation. Having realistic expectations and patience while the system deploys will pay off in the long-term. And don’t forget – honesty is always the best policy.
The implementation of a new SPM system is bound to create cultural impact and change, and the project needs to be treated as every bit as monumental as removing the organization’s training wheels.
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