So there we were. The war room. Our Fortune 100 client was showing us the sequestered conference room where the company’s senior leadership gathers weekly to review business performance and set strategic direction. On the walls hung a sea of performance reports showing everything from current financial projections to the number of customer-facing calls the sales force had conducted year-to-date. Literally hundreds of data points culled from the company’s customer relationship management (CRM) tool were reported in vividly colored charts for the leadership team’s real-time consideration.
There was data at an aggregate level. Data at the sales manager level. Data sliced by product line. Data sliced by region, by customer segment, and by the stages of the company’s sales cycle. Data sliced and diced in every way imaginable—truly a world-class demonstration of performance reporting. It was a scene that would make any IT director stare in amazement and any senior executive turn green with envy.
Looking at the walls, it was easy to envision a typical weekly war room meeting, which might resemble the classic scene from a World War II Hollywood movie in which analysts scurry about updating information on the walls, while leadership takes it all in and formulates a strategy to outflank the enemy. Except in this case, the generals are VPs of sales. The soldiers are sales-people. The battlefields are sales territories. The numbers on the wall are not enemy head count—they are product sales, pipeline size, sales rep activity, win/loss ratios, profit margins, and of course, revenue forecasts. Anything and everything that can be reported has a spot reserved on the war room walls.
The constantly updated numbers are key ingredients for the primary activity in the war room—to quickly identify trends (both good and bad) and dole out urgent directives to the field. Is the pipeline too small? Then have the salespeople do more prospecting. Profit margins down? Tell the sales managers to hold their ground. Forecasts inaccurate? Have the reps update the data more frequently. No doubt these weekly meetings are intense, focused, and perceived as high-impact. Ah, the war room. Who wouldn’t want one?
Most companies have their own scaled-down version of the war room—at least in spirit, if not in practice. They have a set of reports that they regularly examine to assess progress against their goals and to determine what actions must be taken in order to ensure the goals are met. The reports aren’t always large-format color prints with pie charts, bar graphs, and scatter diagrams, but it is exceedingly rare today to find a sales force of any size that hasn’t invested in some type of customer relationship management (CRM) or sales force automation (SFA) software for the primary purpose of increased reporting.1
So what has all this reporting gotten us? Well, having all this data at our fingertips has become like comfort food for leadership. A real-time view of sales force performance makes us feel in touch with the organization. And increased transparency to field-level activities gives us the satisfying sense that we are somehow in control of the sales force’s behaviors. However, visibility to an action does not equate to control over it. Let us give you an example of the life-threatening danger of this assumption.
When one of the my children was 18 months old, I left her with a babysitter while I made a quick trip to the store (I was no doubt as much in search of silence as I was in search of provisions). When I returned to my house and opened the door, I saw the terrifying sight of my precious child standing upright on a steep set of stairs, wobbling in her attempt to make it to the next step. Meanwhile the babysitter was sitting calmly across the room just watching the situation unfold. Witnessing the obvious terror on my face as I sprinted across the room toward the teetering child, the sitter attempted to calm me down by saying, “Don’t worry. I am right here. I can see everything she’s doing.” Trying only halfheartedly to contain my anger, I responded, “Watching my daughter fall to her death is not the same thing as preventing her from falling to her death.”
Similarly, watching the walls of the war room is not the same as directing the battle on the field. While seeing activity-level data such as Number of Calls Made or Percentage of Customers Contacted creates a sense of participation in the activities, in reality, it is more akin to watching salespeople climb treacherous stairs from across the room hoping they don’t fall to their deaths. You can see the disaster happen, but you can’t control the outcome.
Despite the billions of dollars that have been spent to enable deep and wide reporting of sales force activities and outcomes, we have seen few instances of increased reporting capabilities actually leading to greater control over sales force performance. Greater visibility provides you with exactly that—greater visibility. Not greater control.
In a nutshell, here is where we are.
Over the last 20 years, we have witnessed a technological revolution known as CRM. With few limits, we now have the ability to generate extremely detailed reports that allow us to see both the activities of our sales reps and the outcomes they create.
The amount of information that we have to help us manage is unprecedented in the history of sales management and is only getting bigger. Our challenge in the future is more likely to be an excess of data, not a scarcity of it. Even today, we observe “analysis paralysis” in companies for which information overload has crippled the very decision-making ability that reporting was meant to enable.
Enlightened about what’s happened—and even what is currently happening—but we have little more control over the future than we did in the past. What then are we missing?
What we are missing is quite fundamental:
We are missing the operating instructions for a sales force.
How do the numbers on the war room wall work? Of all the data points that we see on our reports, which are the inputs, and which are the outputs? Which are the causes, and which are the effects? If I want to move this number, should I push that one or pull another? What we don’t yet know is how to work the numbers.