Sec Boosting Sales Coaching Quality

SALES, MARKETING, AND COMMUNICATIONS PRACTICE INTEGRATED SALES EXECUTIVE COUNCIL

Improve Rep Performance Through Coaching

© 2009 The Corporate Executive Board Company. All Rights Reserved.

This document may not be reproduced or redistributed without the expressed permission of the Corporate Executive Board Company. The Integrated Sales Executive Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Integrated Sales Executive Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Integrated Sales Executive Council is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Integrated Sales Executive Council or its sources, or b) reliance upon any recommendation made by the Integrated Sales Executive Council.

COPIES AND COPYRIGHT As always, members are welcome to an unlimited number of copies of the materials contained within this handout. Furthermore, members may copy any graphic herein for their own internal purpose. The Corporate Executive Board Company requests only that members retain the copyright mark on all pages produced. Please contact your Member Support Center at +1866-913-6451 for any help we may provide. The pages herein are the property of the Corporate Executive Board Company. Beyond the membership, no copyrighted materials of the Corporate Executive Board Company may be reproduced without prior approval. LEGAL CAVEAT The Corporate Executive Board Company has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Corporate Executive Board Company cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Corporate Executive Board Company is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board Company nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Corporate Executive Board Company or its sources, or b) reliance upon any recommendation made by the Corporate Executive Board Company. CONTACT US For more information, or call +1-866-913-6451.

© 2009 The Corporate Executive Board Company. All Rights Reserved.

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This document may not be reproduced or redistributed without the expressed permission of the Corporate Executive Board Company. The Integrated Sales Executive Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Integrated Sales Executive Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Integrated Sales Executive Council is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Integrated Sales Executive Council or its sources, or b) reliance upon any recommendation made by the Integrated Sales Executive Council.

Sales Executive Council

Creative Solutions Group

Lead Consultants Mary Detterick Arren Spence

Senior Graphic Design Specialist John Gendreau

Sales Executive Council www.sec.executiveboard.com Washington, D.C. Telephone: +1-571-303-3000 Fax: +1-571-303-3100 Chicago Telephone: +1-312-730-9000 Fax: +1-312-730-9100

Contributing Designers Michelle Aldrich Erin O’Donnell

Contributing Consultants Shauna Ferguson Hadley Heffernan Andrew Kent Jessica Pitts Julie Verry

San Francisco Telephone: +1-415-293-5825 Fax: +1-415-293-5826

Senior Publications Editor Kevin Mullooly

Practice Manager Ashok Nachnani Managing Director Matthew Dixon

London Telephone: +44-(0)20-7632-6000 Fax: +44-(0)20-7632-6001 New Delhi Telephone: +91-124-417-8500 Fax: +91-124-417-8501 Sydney Telephone: +61-2-8216-0831 Fax: +61-2-8216-0701 Note to Members

Legal Caveat

This project was researched and written to fulfi ll the research requests of several members of the Corporate Executive Board and as a result may not satisfy the information needs of all member companies. The Corporate Executive Board encourages members who have additional questions about this topic to contact the Board staff for further discussion. Descriptions or viewpoints contained herein regarding organizations profi led in this report do not necessarily reflect the policies or viewpoints of those organizations.

The Sales Executive Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Sales Executive Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Sales Executive Council is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Sales Executive Council or its sources, or b) reliance upon any recommendation made by the Sales Executive Council.

Confidentiality of Findings This document has been prepared by the Corporate Executive Board for the exclusive use of its members. It contains valuable proprietary information belonging to the Corporate Executive Board, and each member should make it available only to those employees who require such access in order to learn from the material provided herein and who undertake not to disclose it to third parties. In the event that you are unwilling to assume this confidentiality obligation, please return this document and all copies in your possession promptly to the Corporate Executive Board.

© 2008 Corporate Executive Board. All Rights Reserved. This document may not be reproduced or redistributed without the expressed permission of the Corporate Executive Board Company.

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The Integrated Sales Executive Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Integrated Sales Executive Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Integrated Sales Executive Council is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Integrated Sales Executive Council or its sources, or b) reliance upon any recommendation made by the Integrated Sales Executive Council.

On Common Ground Clarifying Terms Is Essential to Achieving Coaching’s Full Range of Benefits

Definition of Coaching 1

2 “…ongoing…” Coaching is not a single event or even a series of events, but a focused, continuous improvement effort. Coachees never “graduate.”

3 “…dynamic…” Coaching evolves over time as coachee needs and sales situations change.

“…job-embedded…” Unlike training, coaching is integrated real time with day-to-day workflow and directly relevant to actual business situations.

An ongoing and dynamic series of job-embedded interactions between a sales manager and his or her direct report, designed to diagnose and correct or reinforce behaviors specific to that individual

Coaching Managing 4

Training

5 “…sales manager…” While managers may offload some coaching to others (e.g., specialists, peers), they do not relinquish responsibility for overall coachee development.

6 “…diagnose…specific to that individual.” Coaching is completely customized to the individual. It targets only relevant and pressing needs and is tailored to coachee’s specific personality.

“…behaviors…” Coaching is primarily about the application, not the acquisition, of skills and knowledge. It is concerned with doing, not simply knowing.

Just Informal Training? While many refer to training as “formal” and coaching as “informal,” this distinction is neither helpful nor accurate. Effective coaching will tend to be formal, highly structured, deliberate, and regularly scheduled. The unique advantages of coaching stem from how it is tailored to the individual and delivered at the point of need. Same Thing as Managing? Coaching is one component of managing, but not the same thing; when this distinction is blurred, managers often fail to look beyond the numbers, assuming that “parachuting” in to save deals is as much coaching as developing reps to overcome challenges themselves. This document may not be reproduced or redistributed without the expressed permission of the Corporate Executive Board Company. The Integrated Sales Executive Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Integrated Sales Executive Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Integrated Sales Executive Council is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Integrated Sales Executive Council or its sources, or b) reliance upon any recommendation made by the Integrated Sales Executive Council.

Source: Sales Executive Council research.

4

Return on Coaching Coaching Continues to Have a Big Impact on Sales Performance Rep Percentage to Goal by Coaching Effectiveness 2005

Something to Write Home About “Targeted rep coaching is the primary way we drive customer engagement. We’ve seen average revenue per rep rise 25% as a result.” SVP, Sales Financial Services Company

105%

102% 97%

“We first launched our coaching efforts in our inside sales group and saw an immediate $90/hour ($3,600/week/rep) impact.” EVP, Sales and Operations Hospitality Company

90%

83%

75% High

Medium

Low

Coaching Effectiveness*

Teams that report receiving low-quality coaching are far more likely to underperform than teams receiving high-quality coaching.

“Coaching is helping with retention. Manager quality scores and financial results are up. We’ve seen roughly $90 million in productivity gains so far.” VP, Sales Strategic Planning Pharmaceuticals Company “We implemented a coaching program in large part to improve forecasting accuracy; nine months after implementing our program, we saw a 30 to 40% increase in forecasting accuracy, which equated to a significant cost savings for the manufacturing and distribution organizations.” Manager, Organizational Development Biotech Company

n = 2,600. * As determined by each manager’s direct reports. This document may not be reproduced or redistributed without the expressed permission of the Corporate Executive Board Company. The Integrated Sales Executive Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Integrated Sales Executive Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Integrated Sales Executive Council is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Integrated Sales Executive Council or its sources, or b) reliance upon any recommendation made by the Integrated Sales Executive Council.

Source: Sales Executive Council research.

5

Moving the Middle Coaching Has the Greatest Performance Impact When Focused on the Core Sales Performance by Coaching Effectiveness 2005 ●

50%

The middle 50% of each population shifts as follows:

■

Improvement in Sales Performance Depending on Coaching Effectiveness Gap to Goal ●

■

●

■

107% +8%

Proportion of Reps

99% ●

30%

●

■

■

Population Scoring Coaching Effectiveness in the Bottom Third ●

■

Performance improvements are likely to be marginal at either end of the performance spectrum.

●

■

● ■

● ■

10%

Population Scoring Coaching Effectiveness in the Top Third

0.0

0.5 Bottom 10% Median (Equivalent to < 60% of Goal) (Equivalent to ~100% of Goal)

Key Takeaway

1.0 Top 10% (Equivalent to > 140% of Goal)

Relative Sales Performance*

Coach the core for performance and the stars for retention.

Population Scoring Coaching Effectiveness in the Bottom Third Population Scoring Coaching Effectiveness in the Top Third * To account for different distributions depending on sales context, gap-to-goal numbers were converted to deciles.

Source: Sales Executive Council research.

This document may not be reproduced or redistributed without the expressed permission of the Corporate Executive Board Company. The Integrated Sales Executive Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Integrated Sales Executive Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Integrated Sales Executive Council is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Integrated Sales Executive Council or its sources, or b) reliance upon any recommendation made by the Integrated Sales Executive Council.

6

Watch Your Step “Land Mines” on the Path to High-Quality Coaching

Misplaced Priorities

Incapable Managers

“We’ve been focusing on coaching for three years now, but honestly, I’m not sure managers are even finding time to coach.”

Insufficient Metrics

“Our sales managers’ idea of coaching is to go in and close the deal for the rep. They just don’t know any better.” Global Sales Development Lead Energy Company

Director, Sales Education Computer Hardware Company

“We focus on time, but, recently, we asked reps and managers how much coaching is happening, and there’s a huge disconnect. Bad coaches estimate high, good coaches estimate low, and, in both cases, reps say the opposite. Reps just want better coaching.” SVP, Client Services Financial Services Company

Recognize Coaching Is Key Lever to Boost Performance

Create Sufficient Time/Capacity for Coaching

Ensure Coach and Coachee Share Common Understanding of Coaching

Misaligned View of Coaching “As we integrated our recent merger, we realized their culture didn’t embrace coaching, and interactions with managers weren’t value-added. Our guys want to coach, and the new reps (from the acquired company) just see it as criticism.”

Train Incumbents in (and Precertify New Hires for) Coaching Skills

Provide Coaches with Tools and Guidance to Drive Coaching Sessions

Measure and Reward HighQuality Coaching

World-Class Coaching Program

Poor Execution “We end up focusing our coaching on our low performers because they are easier to identify.” Global Sales Director Business Services Company

EVP, Sales and Service Medical Products Distributor This document may not be reproduced or redistributed without the expressed permission of the Corporate Executive Board Company. The Integrated Sales Executive Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Integrated Sales Executive Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Integrated Sales Executive Council is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Integrated Sales Executive Council or its sources, or b) reliance upon any recommendation made by the Integrated Sales Executive Council.

Source: Sales Executive Council research.

7

Boosting Sales Coaching Quality Aligning Coaching Strategy to Individual and Business Needs I. Establishing a No-Exceptions Threshold of Coaching Skill

II. Limiting Coaching to Highest-Value Activities

III. Sustaining Focus on Coaching Quality

Upskilling Incumbent Managers

Reinforcing High-Performance Behaviors

Expanding Coaching Beyond the Line

#1 Closed-Loop Coaching Development Process

#3 Stage-Aligned Coaching Road Maps

#5 Multilevel Coaching Framework

A simulation-based training program, accompanied by tailored in-field coaching support, ensures baseline coaching capability in management force.

Process-embedded coaching guidelines help managers surface immediate development needs in the context of opportunity management.

Quarterly coaching sessions extend up and down the organization, ensuring focused coaching at each level and overall alignment with corporate strategy.

p. 24

p. 46

p. 66

Certifying Managers for Coaching Competence

Focusing Coaching on Evolving Development Needs

Creating Accountability for Coaching

#2 Tiered Coaching Accreditation Program Managers are stratified by the level of demonstrated coaching proficiency and incentized to pursue ongoing improvement.

#4 Dynamic Coaching Content Toolkit

#6 Senior Executive Assessment Panel

A field-accessible coaching toolkit enables managers to efficiently and effectively diagnose rep capabilities, prioritize needs, and build customized coaching plans.

p. 35

Sales leadership panels conduct qualitative territory and team development reviews with each FLSM, creating manager accountability for executing thoughtful team coaching strategies.

p. 53

p. 79

Appendix * Message Gatekeeper Team

Secondary Coaching Protocols

Coaching Precertification and Onboarding

Stage-Aligned Coaching Road Maps

Root-Cause Analysis Coaching Aids

Coaching Tracking Record

Training Reinforcement Framework

* Pseudonym. This document may not be reproduced or redistributed without the expressed permission of the Corporate Executive Board Company. The Integrated Sales Executive Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Integrated Sales Executive Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Integrated Sales Executive Council is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Integrated Sales Executive Council or its sources, or b) reliance upon any recommendation made by the Integrated Sales Executive Council.

8

SALES, MARKETING, AND COMMUNICATIONS PRACTICE INTEGRATED SALES EXECUTIVE COUNCIL

For additional information or to review the presentation in its entirety, please contact us.

E-mail us at [email protected]

Call us at +1-866-913-6451

Or visit us online at www.sec.executiveboard.com

© 2009 The Corporate Executive Board Company. All Rights Reserved.

This document may not be reproduced or redistributed without the expressed permission of the Corporate Executive Board Company. The Integrated Sales Executive Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the Integrated Sales Executive Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Integrated Sales Executive Council is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the Integrated Sales Executive Council or its sources, or b) reliance upon any recommendation made by the Integrated Sales Executive Council.