Sales compensation management impacts your company’s ability to quickly respond to changes while remaining flexible to opportunities. Too often, organizations operate on homegrown systems that are a mish mash of disparate automated and manual processes. Any change is cumbersome and takes months to implement, which wreaks havoc in the company’s ability to effectively commission their sales force. Organizations simply cannot afford to remain stuck in an inefficient sales compensation management system if they hope to remain competitive and respond to market needs in a timely fashion.
Harmonizing business systems is necessary, but a challenge due to complexity and time constraints. This is where agile sales compensation management comes in. With a continuous improvement approach, changes occur in weeks rather than months. This has a positive impact on the sales force and the variable plans that drive sales force behavior.
While preparing for my presentation at WorldatWork’s Spotlight on Sales Compensation conference, I formulated a few lessons from my experience with agile processes, which I think are useful to any company looking to optimize sales compensation management:
- Work in cycles. Introduce changes gradually and deal with specific sets of issues. Set your expectations accordingly and focus on the goals of each cycle.
- Change your mindset before you change the compensation plan. Start with a vision but divide things into smaller, more manageable “chunks”. Break long-term goals into smaller objectives, which you can achieve over short periods of time (weeks or even days).
- Prioritize based on sales force needs and sales strategy.
- Analyze results after each cycle. Apply improvements in a new cycle, rather than extending or modifying the current cycle.
- Communicate in an agile manner. Keep your sales force up to date with changes and explain the impact on their activity. Periodically gather feedback from key stakeholders.
Agile sales compensation management allows for changes to happen faster. There is also more flexibility to fix issues. Agile is rooted in constant collaboration and communication so team cohesion and morale typically improve. Overall, the company is better positioned to seize opportunities and stay competitive.
We have recently used agile sales compensation management to help a client successfully go through a complex integration process triggered by a large acquisition. We will demonstrate the power of agile and share best practices during WorldatWork’s Spotlight on Sales Compensation which will take place August 24-26, in Chicago. If you have any questions regarding agile management, I’d be happy to discuss it at the event.