And we keep talking about deployment of targets. If you have lost Part one of this special post, we suggest you run over there and check out the content before moving on. In this second installment of our conversation, we're going to look at two more ways of getting your entire company involved in the business' goals and feeling co-responsible for the success of the enterprise.
In Part oneAt the end of the workshop, we saw a very simple model of goal-setting, where the strategic level goal was divided among the tactical level representatives and then among the operational level employees. Everything was mathematically the same, with no different weights or responsibilities for anyone. We ended our first post by asking whether this was actually executable in any market and whether it would bring good results for your company. If you've thought about it and want to leave your opinion, feel free to use the comments field at the bottom of the page. Now let's move on to the alternatives for those who didn't quite agree with the first model:
Target deployment with safety margin
Trusting that 100% of your salespeople will reach the target is a huge amount of trust. Often one or other salesperson doesn't manage to reach the proposed figures or the market isn't so good, which leads to a breakdown in your planning. To avoid getting into trouble by being too optimistic, set targets with a margin of safety.
Sticking with our previous example, we have a strategic target of 100 million reais in annual turnover for the company, to be distributed across five business units. But each unit contributes a different percentage to the total turnover:
- Unit 1: 30%
- Unit 2: 20%
- Unit 3: 20%
- Unit 4: 15%
- Unit 5: 15%
Within each unit, we have five salespeople, each of whom also contributes differently to total sales, according to their performance history:
- Seller 1: 30%
- Seller 2: 20%
- Seller 3: 20%
- Seller 4: 15%
- Seller 5: 15%
If each salesperson's performance has been the same over the last few months, there's no point in setting very high targets for the lower performers, because they'll never reach the level of the first salesperson. What you need is to distribute the target fairly and equally. So, think of the following configuration:
- Seller 1: 25%
- Seller 2: 25%
- Seller 3: 25%
- Seller 4: 25%
- Seller 5: 25%
Yes, the sum of the individual targets exceeds the strategic target by 25%, which means you have a safety margin. Even if your salespeople don't perform optimally, there will be an "extra" salesperson to ensure that the strategic target is met.
Breakdown of productivity targets
Moving away from sales, we can also have targets in relation to your team's productivity, such as time available versus results. Imagine that your sales team, made up of five salespeople, works eight hours a day, or 40 hours a week. The strategic goal is to convert 60 new customers a month. Each salesperson should therefore bring in 12 new customers.
Of the 40 hours they work each week, the salespeople spend 10 hours capturing leads and the other 30 hours doing bureaucratic work. In those 10 hours, 20 new leads are captured and only one customer is converted. In other words, at the end of the month, each salesperson will have four new customers and the company will have only reached 1/3 of its target. What do you do in this situation?
Increase lead capture time so salespeople can be more productive! If you double each salesperson's lead capture time, you'll have two new customers a week per salesperson, which means 40 new customers a month. But you still won't reach your target. So you need to invest in automation and computerization of your company so that salespeople dedicate 30 hours to capturing leads and only 10 hours to bureaucratic work, reaching your target of 60 new customers a month.
Each process in your company can have broken down goals so that everyone is involved and knows exactly how to act to generate the expected results. If you still don't know how to define success indicators of your processes, rest assured, we have prepared exclusive material that will help you identify them! Access the material here and improve your company's results!
See also: "How can the deployment of goals transform your business and direct your company's leadership?"
