Issue 2
Lack of Essential Skills, which Leads to Below Average Performance and Consequently Below Average Sales Results
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SOLUTIONS
Research by the American Society for Training & Development (ASTD) has shown that organizations that are able to offer their salespeople opportunities for ongoing development are ten times more likely
to create more peak-performing salespeople than those that don’t.
Data collected by ASTD is the first published research to overcome the fundamental measurement problems that occur when correlating per-capita investment, an intangible asset, and financial profit.
The database contains standardized information on training expenditures for hundreds of publicly traded firms. Data has been collected on more than 2,500 firms in 63 countries, of all sizes and industries. Training investment is measured in dollars per-capita.
CORRELATION BETWEEN TRAINING INVESTMENT AND STOCKHOLDER RETURNS
ASTD’s results show there is a significant correlation between dollars spent on training per-capita and total stockholder return one year later. Profitability does not show immediately because of a
lag effect in the stock market, but it shows a year later because of the hidden nature of investments in staff.
The following findings by ASTD compare the relationship between training investment and total stockholder return (TSR) in the subsequent year:
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Firms in the top quartile with respect to training investments have higher median TSRs in the subsequent year than firms in the other three training quartiles. Further, the third quartile is higher
than the second, and the second is higher than the first (the quartile with the lowest training investment).
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Organizations in the top half for training expenditure in one year have a mean TSR in the following year of 36.9%, while organizations in the bottom half have a mean TSR of only 19.8%.
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Firms that spend more than average on training have TSRs that are 86% higher than firms that spend less than average and 45% higher than market average.
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The model estimates that each dollar invested in training leads to a $33.57 benefit to the firm. Bearing in mind the disparity between "direct cost" and the true cost of "learning," the return may be
more like $3.36 to $6.72—still a very high return.
Therefore, Sales Directors need to allow sufficient time to enable their investment in training and development to "pay off." Introducing ongoing reinforcement programs will help accelerate the
benefits gained from the training and development investment.
A VARIETY OF DEVELOPMENT SOLUTIONS
Skills development can take many forms, including formal and informal mentoring, sales coaching by managers, and/or classroom training, distance- or e-learning, and other kinds of training.
MENTORING In mentoring, salespeople choose a mentor (a high-performer within the organization who can serve as a model and/or guide) and consult the person periodically for advice on a range of
issues, from strategy for handling a particular sales situation to advice on long-term career development.
Since the best way to learn something well is to teach it to others, mentoring programs offer organizations a win-win proposition: in addition to enhancing the skills and performance of the
salespeople, they help mentors develop their sales skills while improving their coaching and management skills as well.
According to the Nalco Chemicals article in Selling Power, Jan/Feb2004, taking action meant developing a unique sales recruitment, training, and mentoring solution, compressing the
traditional five years of on-the-job training into an intensive 18-month program that involves both classroom curriculum and field-based coaching for the existing salespeople.
Existing salespeople formed a core of mentors who would each shepherd a trainee through the 18-month learning process. Mentors committed to spending at least 40% of their workweek with
students.
COACHING
Today, more and more organizations are waking up to the value of building a strong coaching culture. Analogies to athletic coaching are common but especially apt. Training alone does not guarantee
that a great tennis player will deliver Grand Slam-winning performance.
This can only come from continuous daily support and guidance from an expert coach. Equally, top sales professionals need expert coaching support from their managers to stay at the top of their game.
Whether sales managers deliver their coaching support face-to-face, on the telephone, or via e-mail, those organizations that have a strong coaching culture attract and retain the best salespeople.
The challenge for Sales Directors is to provide the support that sales managers—all of whom are hard-pressed for time—need in order to provide the kind of support their salespeople must have.
Successful Sales Directors have found a range of supporting tools, resources, and kits that save managers’ time and enhance the impact of their coaching time.
Whatever coaching framework is chosen by an organization, it must be easy to use, flexible so that each sales team leader can tailor the coaching sessions to the needs of their team, participative so
all of the salespeople are engaged, and, above all, fun. The fun factor encourages salespeople to become "hooked" on their own continued development.
This view is endorsed by Sir John Harvey-Jones, who says, "In my experience, it is extremely difficult to teach grownups anything. It is, however, relatively easy to create conditions under which
they will teach themselves."
TRAINING
Finally, formal training can also have a huge influence on skills development, especially if it is implemented with two additional ingredients:
1. The training must be based on what the salespeople need and should be tailored to address diagnosed performance gaps. Using a diagnostic approach saves an organization money and time because there
is nothing to be gained from teaching people something that they are already doing well or, conversely, that they don’t need to do in the first place.
A welltargeted program is far more likely to engage participants’ full interest because they’ll see its immediate relevance to their daily results. Also, having an objective performance assessment
methodology—one that solicits candid feedback from customers—can ensure that managers keep their "fingers on the pulse" of where their team needs to develop.
2. Any training program will be more effective when the skills that participants learn are reinforced on a regular, continual basis. For maximum impact, training must be reinforced by every level of
management. Such reinforcement can come in many forms, but the best way is for the sales manager to serve as a "model of excellence" who provides an ongoing demonstration of required skills so salespeople begin to live and breathe them.
The importance of ongoing performance development is summarized very effectively by Steven S. Reinemund, CEO PepsiCo Inc.:
"To have growth in products, you have to have growth in people"
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