Good evening

I'm happy to report that our Ballistix list has got off to a nice start
with 147 members and 28 posts in its first week.

Thank you for participating!

I have a couple of small administrative requests:

1. When replying to a post, please delete all portions of preceding
messages that are not absolutely essential for context.  This prevents
those members who have selected the 'daily digest' option from having to
filter-out multiple copies of messages.  If you forget, I'll attempt to
do it for you; however, because I'm performing most of my moderation
duties using my Smart Phone there are limits to what I can do!
2. If you see potential in this list, please feel free to encourage
your associates, colleagues or even employees to join too.  I've set a
personal goal of about 500 members in the first three months.  Any
assistance will be much appreciated.

Justin Roff-Marsh


[Non-text portions of this message have been removed]

Ben, you should remember that you work in an unique service industry.

Having employed many designers and writers over the years, I've found
that financial reward plays only a tiny role in whether a person stays
or leaves.

The real indicator is job satisfaction. Is the type of work they're
doing, and the type of clients they're interacting with, providing them with a
sense of fun and achievement?

Moreover, is it pushing their creative nous to new levels (particulary
for designers)?

If you are wanting to your agency's creative output to the absolute
limit in edgy design, you should have little trouble
finding 'creatives' who are happy to stay for that very reason.

Give them an environment in which to be truly creative and they'll
love you for it (and those that don't shouldn't have been there in the
first place).

Jason

It seems that Hertzberg's defining work on performance has been
forgotten - give those incentives that have a long lasting positive
effect like responsibility and recognition and eliminate those practices
that only have negative effect like bad administration.  Manage sales
people as though they are people not number crunchers - set goals, give
feedback etc. etc.

Regards,

Paul Campbell

Gerry

 

Your comments are interesting but in the case of commission agents only this would not apply. I have been on commission only for a number of  years if I don't sell I don't get paid. If I sell well I get paid very well. I need to establish good marketing plans at risk and at my own expense and if  they  succeed then all is beneficial to both parties and if not well thats my issue.

 

Kind regards 

John Morrison

----- Original Message -----

From: John Morrison

To: ballistix@yahoogroups.com

Sent: Friday, June 17, 2005 7:27 PM

Subject: Re: [ballistix] Performance based pay -a case for?

Gerry

 

Your comments are interesting but in the case of commission agents only this would not apply. I have been on commission only for a number of  years if I don't sell I don't get paid. If I sell well I get paid very well. I need to establish good marketing plans at risk and at my own expense and if  they  succeed then all is beneficial to both parties and if not well thats my issue.

 

Kind regards 

John Morrison  . 

----- Original Message -----

From: Gerry Goldberg

To: ballistix@yahoogroups.com

Sent: Friday, June 17, 2005 6:00 PM

Subject: [ballistix] Performance based pay -a case for?

May I weigh in to this discussion with some thoughts based on having tried various incentives -  financial reward for achievement  but also establishing an environment where success is valued for itself.

 

The latter has always won hands down.  And the reasoning is simple.

 

Every survey and research result I have read places financial reward at best in the middle of the various reasons why people work where they do.  I have never ever seen it top the list.  It is, I believe,  a fallacious belief that anyone will do anything for money.

 

Whenever we have offered and given a cash incentive for improved performance there has hardly ever been even a murmur of appreciation.  Yet when anyone is placed before his/her peers and publicly applauded for their success they not only show instant appreciation but can't wait to be up and running again.

 

Naturally, paying what the job is worth and offering a satifactory financial reward in terms of what the market is offering generally for that job is a sine qua non.  But from thereon in I am convinced that incentives are not in themselves an answer to improved performasnce.  A good environment and suitable acclaim are.

 

So I side with the concept of setting up a suitable environment and taking the time to do it.  The long term benefits are sufficient to warrant the time spent.  And part of that environment is recognition by acclaim for good performance.

 

Gerry Goldberg

Masnaging Director

Pall Mall Manufacturing Co Pty Ltd

Ph 95848644

Ballistix: Sales Process Engineering
http://www.ballistix.com.au



Ballistix: Sales Process Engineering
http://www.ballistix.com.au

1. Eliminate multi-tasking
2. Take a formal approach to scheduling (based upon maximising Throughput/ConstraintUnit)
3. Micro-manage

1. Ensure that performance is within an acceptable range
2. Take a less formal approach to multi-tasking and scheduling (first-in-first-out should be good enough)
3. Manage by exception

----- Original Message -----

From: Gerry Goldberg

To: ballistix@yahoogroups.com

Sent: Friday, June 17, 2005 6:00 PM

Subject: [ballistix] Performance based pay -a case for?

May I weigh in to this discussion with some thoughts based on having tried various incentives -  financial reward for achievement  but also establishing an environment where success is valued for itself.

 

The latter has always won hands down.  And the reasoning is simple.

 

Every survey and research result I have read places financial reward at best in the middle of the various reasons why people work where they do.  I have never ever seen it top the list.  It is, I believe,  a fallacious belief that anyone will do anything for money.

 

Whenever we have offered and given a cash incentive for improved performance there has hardly ever been even a murmur of appreciation.  Yet when anyone is placed before his/her peers and publicly applauded for their success they not only show instant appreciation but can't wait to be up and running again.

 

Naturally, paying what the job is worth and offering a satifactory financial reward in terms of what the market is offering generally for that job is a sine qua non.  But from thereon in I am convinced that incentives are not in themselves an answer to improved performasnce.  A good environment and suitable acclaim are.

 

So I side with the concept of setting up a suitable environment and taking the time to do it.  The long term benefits are sufficient to warrant the time spent.  And part of that environment is recognition by acclaim for good performance.

 

Gerry Goldberg

Masnaging Director

Pall Mall Manufacturing Co Pty Ltd

Ph 95848644

Ballistix: Sales Process Engineering
http://www.ballistix.com.au

Ben

Yep, skiing's fun.  And taking a team of cool people skiing is a bunch of fun
too!

But there's no point in institutionalising this as a formal benefit program.

I do see value in facilitating regular team social events; not as a reward, but
as a way of building team spirit and cohesion.

I suspect the ideal frequency for these is monthly, however; not annually.  We
get great value from ours; and they cost next to nothing.

Justin

Once again, thanks for your feedback!

Cheers
Ben

Ben

Let me paraphrase some of your colleague's arguments for performance pay, and then try and uncover the assumptions behind each.

* * * *

ARGUEMENT
The team needs an incentive to work long hours.

ASSUMPTION
This incentive can only be provided by performance pay.

MY POSITION
The requirement to work x number of late nights can be factored into the team members' salaries.  If it transpires that team members have to work more late nights than expected, either re-negotiate salaries or recognise that you are under-resourced and fix the problem.

Our people work long hours when required, not because they feel obliged to do so -- and not because we have some bonus system to encourage this -- but because they care about their work (and their clients) and they enjoy feeling productive.

* * * *

ARGUEMENT
It's important you retain valuable staff.

ASSUMPTION
Performance pay aids retention.

MY POSITION
Staff expect to be paid what they're worth.  If they're not, they'll leave: as they well should.

Once this necessary condition is met, staff -- like management -- are driven by productive achievement.

Because of system complexity, performance pay schemes can NEVER accurately model the correlation between individual behaviour and profitability.  The inevitable inequities will almost certainly result in resentment and interfere with the natural joy of achievement.

* * * *

ARGUEMENT
If the team isn't performing, team members should be penalised.

ASSUMPTION
The output of the system is the sum of individual outputs.

MY POSITION
This is flat-out wrong.

You mention the non-linear behaviour of systems (and, as a mathematician, I know you understand this concept).  Encouraging each team member to work at full capacity 100% of the time is a sure way to destroy the output of the system -- and to render it unmanageable.

Sometimes -- as you know from reading The Goal -- team members add the greatest value by not working!

* * * *

ARGUEMENT
Incentives cause buy-in

ASSUMPTION
Team members will not buy-in to a cause unless they are provided with cash incentives.

MY POSITION
People buy into all sorts of causes without cash incentives.  People often ask me what incentive there is for people to work in the absence of performance pay.  The incentive should be the work itself!

If it isn't, fix the environment: that's management's job!

* * * *

In summary, pay staff what they're worth and then engineer an environment that challenges them and provides them with objective feedback.  Then ... get the hell out of the way!

Hope this helps

Justin

________________________________

From: ballistix@yahoogroups.com on behalf of benstokes78
Sent: Thu 16/06/05 10:04 PM
To: ballistix@yahoogroups.com
Subject: [ballistix] Performance based pay -- a case for?


Hi Justin

If you have the time I'd love to hear your thoughts on incentive-
based pay particular to our organisation.  Of course we already know
your stance, but in particular I'd be interested to hear your
rebuttal of Matt's points.




Ballistix: Sales Process Engineering
http://www.ballistix.com.au

Send instant messages to your online friends http://au.messenger.yahoo.com

Ben

Let me paraphrase some of your colleague's arguments for performance pay, and
then try and uncover the assumptions behind each.

* * * *

ARGUEMENT
The team needs an incentive to work long hours.

ASSUMPTION
This incentive can only be provided by performance pay.

MY POSITION
The requirement to work x number of late nights can be factored into the team
members' salaries.  If it transpires that team members have to work more late
nights than expected, either re-negotiate salaries or recognise that you are
under-resourced and fix the problem.

Our people work long hours when required, not because they feel obliged to do so
-- and not because we have some bonus system to encourage this -- but because
they care about their work (and their clients) and they enjoy feeling
productive.

* * * *

ARGUEMENT
It's important you retain valuable staff.

ASSUMPTION
Performance pay aids retention.

MY POSITION
Staff expect to be paid what they're worth.  If they're not, they'll leave: as
they well should.

Once this necessary condition is met, staff -- like management -- are driven by
productive achievement.

Because of system complexity, performance pay schemes can NEVER accurately model
the correlation between individual behaviour and profitability.  The inevitable
inequities will almost certainly result in resentment and interfere with the
natural joy of achievement.

* * * *

ARGUEMENT
If the team isn't performing, team members should be penalised.

ASSUMPTION
The output of the system is the sum of individual outputs.

MY POSITION
This is flat-out wrong.

You mention the non-linear behaviour of systems (and, as a mathematician, I know
you understand this concept).  Encouraging each team member to work at full
capacity 100% of the time is a sure way to destroy the output of the system --
and to render it unmanageable.

Sometimes -- as you know from reading The Goal -- team members add the greatest
value by not working!

* * * *

ARGUEMENT
Incentives cause buy-in

ASSUMPTION
Team members will not buy-in to a cause unless they are provided with cash
incentives.

MY POSITION
People buy into all sorts of causes without cash incentives.  People often ask
me what incentive there is for people to work in the absence of performance pay.
The incentive should be the work itself!

If it isn't, fix the environment: that's management's job!

* * * *

In summary, pay staff what they're worth and then engineer an environment that
challenges them and provides them with objective feedback.  Then ... get the
hell out of the way!

Hope this helps

Justin

________________________________

From: ballistix@yahoogroups.com on behalf of benstokes78
Sent: Thu 16/06/05 10:04 PM
To: ballistix@yahoogroups.com
Subject: [ballistix] Performance based pay -- a case for?


Hi Justin

If you have the time I'd love to hear your thoughts on incentive-
based pay particular to our organisation.  Of course we already know
your stance, but in particular I'd be interested to hear your
rebuttal of Matt's points.

Hi Justin

If you have the time I'd love to hear your thoughts on incentive-
based pay particular to our organisation.  Of course we already know
your stance, but in particular I'd be interested to hear your
rebuttal of Matt's points.

To give you some background we're changing from a partnership to a
company as of July 1 and are bringing on a new director in Matt
Forman.  We're debating the merits of rewarding staff based on EBIT
as opposed to paying them full-market rate without any further
incentive.  I've pointed Matt and Damien in the direction of your
article and pointed out that we probably don't want our staff to
be "entrepreneurial" in the sense that they're taking risks in
pursuit of profit.

Matt's points, which I thought were quite relevant, were that we
don't have a highly efficient and totally predictable environment as
we are undergoing growth and probably will continue to do so for the
next 12 to 36 months.  He also pointed out that in our line of work
we often require our team to work long hours to hit deadlines and
that without the appropriate incentives the team will lose heart to
an extent.  As we want to focus strongly on being one of the
most "cutting-edge" design teams in Brisbane our staff is very key
and we want to keep turnover to an absolute minimum (i.e. are
prepared to invest more in retention than the average company).

I'd be interested to hear your thoughts on our particular
circumstance and whether you believe, under any circumstances, there
is a good cause for incentive based pay.

If you would like I'd be happy to begin the discussion on your forum
(I'll just copy and paste this email!)

Cheers
Ben

-----Original Message-----
From: matt@... [mailto:matt@...]
Sent: Thursday, 16 June 2005 11:52 AM
To: Ben Stokes
Cc: damien@...
Subject: RE: An interesting article on performance pay

Some great points! Comments below:
1) There is the risk that some people who are not performing
could/may drag the rest of the team down. If this is the case then I
would argue that we (you, DD & me) are not doing our jobs by failing
to either motivate our entire team correctly or getting rid of the
dead wood fast enough.

2) Yep, these things are important and it will help acheive our
goals but we are rewarding people as a team and even with
systems/controls in place business results are never linear and
there is always room for imporvement and overacheivement.

3) Agree 100%, and part of the environment is culture. It may be
that instead of rewarding individuals with incentives we reward the
team as a whole (a ski trip would be wicked!!)

4) Agree with you that it is good to get many alternate points of
view and can't see a downside in talking with Justin. Worse case is
it helps stimulate the debate and gets us thinking outside the box.

Cheers
Matt


Quoting Ben Stokes <ben@...>:

  Hi Matt

  Two VERY good points you make:

  1.  Working with a start-up is a risk
  2.  Giving incentives based on company performance gives more buy-
in
  into the company.

I'd forgotten the whole EBIT-based incentives discussion we had and
I do think that THAT kind of reward system DOES make sense.  Purely
because if the team, as a whole, isn't performing and we aren't
profiting we don't end up handing over more money than we already
are.  Rewarding in that sense also makes it very clear that it is a
TEAM environment.

Being devil's advocate:

1.  As an employee I'm then held ransom to the work ethic of my
team-mates, who may be prepared to cruise when I want to excel --
how am I  rewarded -- does my base salary increase?

2.  Should we not take more responsibility for EBIT by having more
control over our staff and creating systems/processes that delegate
less control to individuals?

3.  Perhaps we should invest more money into creating an environment
people love to work in rather than invest directly into the people.
Take, for example, Google.  Google attracts the best employees in
the world (so I hear).  My understanding is that they're rewarded
through an excellent working and team environment (not sure whether
or not they support incentives).  The whole team goes skiing once a
year!  Why on earth would you want to work anywhere else when
working for them is such a positive environment (and you're working
for one of the smartest companies... and largest).  We may not be
the biggest, but I think our growth would be exciting to be a part
of...

Finally, if you're interested (no pressure at all!) we could always
ask Justin's opinion on our particular circumstance.  He'd be more
than happy I'm sure to enter into an intellectual debate, however
I'd be fairly sure which side he'd argue for.  If for no other
reason than to get further insight into the decision making process.

I'm kind of 50/50 on the decision at this point :)

Cheers
Ben


-----Original Message-----
From: matt@... [mailto:matt@...]
Sent: Thursday, 16 June 2005 11:06 AM
To: Ben Stokes
Cc: damien@...
Subject: Re: An interesting article on performance pay

Hmmm... I can see your point but do not entirely agree. In the
dynamic environment of a start-up it is very very difficult to have
a "tightly synchronised, highly efficient and totally predictable
environment", in fact it is impossible. In my experience it takes a
special type of person to handle the constant change and
uncertainity that comes with the teritory and usually those types of
people are prepared to take a risk (just by the fact they decided to
work with a start-up in the 1st place shows they beleive in our
vision and are prepared to take a risk, otherwise they would be
working for a corporate or a more established company that can offer
greater security).

While I am a very big beleiver in rewarding our team well and looking
after our talent. The number 1 reason we are starting the business
in the 1st place is to make a profit and a sustainable incoming
stream for us in the future.

And the only way to ensure we are acheiving optimal profit is by
having the entire team focused on both the type line sales and the
bottom line EBIT. I beleive if we pay performance incentives based
on EBIT results we will have a much tighter and profitable company.

I am not advocating that we pay our team peanuts, infact I think we
will have to pay market rate or slightly above on the base salary
but we will require them to go beyond the call of duty on occassion
and in my opinion the best way to make this fair is to give them
ownership in the bottom line results. It doesn't have to be cash
incentives and I would much rather re-invest back into our people by
way of performance prizes (like holidays, diners, wine etc) for
acheivement of business goals then perhaps take a greater risk
because we have increased our fixed costs and paying our team more
than we can afford in high base salarys.

Same as you, my mind is not 100% made up and feel this is a very
important topic that we should all disuss & debate further.

Cheers
Matt

Quoting Ben Stokes <ben@...>:


Hi guys

Please take the time to read:
http://www.ballistix.com.au/cms/default.asp?CategoryID=1

This is Justin's (Ballistix) stance on performance pay.  The
highlighting section for me is where he says "but don't we want our
staff to be entrepreneurial? - no we don't!"

Justin's argument is that entrepreneurial means "taking risks in the
pursuit of profit".  He argues that this is probably the last thing
we want - what we want is our employees doing their job!  He also
argues that the "donkey and carrot" effect only works until the
point the person feels they are earning a fair market rate.  I tend
to agree with this also.

We have three entrepreneurs in the organisation and with our
combined ability I don't think we need any more - at least in the
short term!  I tend to feel if we encourage entrepreneurialism in
our staff they may wish to push the company/s in directions at
tangents to our own.

So should we offer performance pay to staff, especially outside the
sales team? I'd argue no.  I think if we offer people what they're
worth we will get better results out of them.  I did argue to the
contrary previously, but tend to feel this was more because I was
concerned about cashflow.  I don't think this will be as much of an
issue as we thought when I argued that point.

Happy to discuss the alternative, and I'm not 100% set in my ways,
just feel this is a smarter approach.

Remember that because we think a certain way doesn't necessarily mean
our staff does.  We ARE entrepreneurs which is why we're starting
our own company.  If we were employees incentive pay WOULD excite us
because we're inclined to think that way.

Interested to hear your thoughts :-)

Cheers!
Ben Stokes
Strategic Director
Cru Creative
www.crucreative.com.au

A couple of list members have dispensed advice along the lines of 'develop
relationships and listen, listen, listen'.

While new-age management texts abound in such advice, we must recognise that the
'just try harder' method is not a method at all.

In fact, it's the absence of one!

Any management method must proceed from an acknowledgement of the scarcity of
resources.  After all, management is like applied economics: the allocation of
scarce resources, where those resources have alternate uses.

After all, if resources were unlimited all we'd have to do to be frightfully
successful is *all* the good stuff advocated by the latest, best-selling
management authors.

Unfortunately, reality is not unconstrained.  There is fierce competition for
all the resources required to further the goal of our organisations --
competition from both within, and from outside.  These resources include,
management attention, capital, machine time, raw materials, market demand and so
on.

Accordingly, I propose that the key to business success is not to try harder. 
The key is to effectively ration our limited resources so as to:

1.
	 Satisfy those 'necessary conditions' that enable us to stay in business
2.
	 Apply all remaining resources to the critical few factors that make a
disproportionate contribution to the furtherance of the goal of the organisation

Obviously, the Theory of Constraints enables us to identify those critical few
factors.

But the real challenge is mustering the discipline required to say 'no' to all
of the other competing demands for our resources.

When dispensing advice to our colleagues -- and, more importantly, our employees
-- we must be sure to explicitly reference the trade-offs associated with the
course of action we advocate.

To fail to do so is to inadvertently propagate the dangerous notion that reality
is unconstrained.

Justin Roff-Marsh

Thanks Justin, that is exactly what I thought.  But you did a better job of
explaining!

mark

mark woeppel
President & CEO | Pinnacle Strategies


972-491-1333 | 3600 Lowrey Way . Plano . Texas . 75025
  <http://www.pinnacle-strategies.com/> www.pinnacle-strategies.com  |
www.manusync.com <http://www.manusync.com/>



   _____

From: ballistix@yahoogroups.com [mailto:ballistix@yahoogroups.com] On Behalf
Of Justin Roff-Marsh
Sent: Wednesday, June 15, 2005 7:02 PM
To: ballistix@yahoogroups.com
Subject: RE: [ballistix] conversion focus versus throughput focus


Mark and Mike

A better analogy might be to compare one hen that tends lovingly to a single
egg, versus another that lays 10 and provides them all with basic care.

The issue is that the upside potential in the first approach is limited to
one chick (it's also likely the provision of care is likely to exhibit
rapidly diminishing returns).  The assumption is, that the chickens have the
ability to multiple eggs.

In reality, because many salespeople are so overloaded by non-selling
activities (everything other than business development appointments), they
don't have the potential to lay multiple eggs!

Volume and conversion rate aren't the only considerations, particularly in a
constrained sales process.

You also need to consider:

1.

	 Margin (which can be given away to boost volume).  That's why we
always talk in terms of Throughput
2.

	 Under-specification of solutions (which happens if the focus is on
conversion)
3.

	 Unnecessary consumption of appointment slots (which also happens)

That's why we use Throughput/AppointmentSlotsConsumed as the salesperson's
metric.  It subsumes all these other factors.

Justin

But that's only the half of it!

If you charge enough for a ticket to cover:

1.
	 The fixed costs (room hire, etc)
2.
	 The variable costs (promotion, coffee, etc)

Then the incremental cost of putting one more 'bum on a seat' is $0.

This means that your event is almost as scaleable as an e-mail campaign!

This is why some of our clients put hundreds (or sometimes thousands) of people
into seminars.

Events are the most effective method we've discovered to convert relationships
into sales opportunities -- and they're as scalable as e-mail.  If you're not
running events, you really have to consider why not.

(Of course, with Paul, I'm preaching to the converted!)

Justin


		 Hi John:



		 It would have been even more interesting (and perhaps more '5 Star') if you
had charged for the event. That's always an interesting option and it ups the
perceived value enormously.



		 Make your week great,



		 Paul

Why do some many companies work on outdated databases when you can buy
uptodate listings. In Australia I use Incnet a division of China Dotcom.
Target you market ie CIO CEO CFO etc and then introduce your company
followed by an appointment call to setup the  salesperson. Sales people
should be selling and not wasting time making appointments.

John Morrison

----- Original Message -----
From: "Justin Roff-Marsh" <justin.roffmarsh@...>
To: <ballistix@yahoogroups.com>
Sent: Thursday, June 16, 2005 10:29 AM
Subject: RE: [ballistix] Qualification: value adding or value destroying?


> Nicos
>
> Working on an unfiltered list is *only* a waste of time if the salesperson
> is the constraint.  If he is unconstrained, this time has no value.
>
> In many cases we will have the most basic research done by a dedicated
> researcher, and then we will SORT *not filter* opportunities based upon
> their likely Throughput Contribution per Appointment Slot Consumed.
>
> So, in summary, filter out those prospects where there is absolutely no
> potential and sort the rest.  Of course, we do this by sorting the
> Opportunity Buffer and having the sales soordinator schedule the
> salesperson's time (build his schedule) by simply drawing opportunities
> from the top of the list.
>
> Justin
>
> Working on an unfiltered list is a waste of time. If the list is filtered
> according to some criteria that proved to be working, then qualification
> is the correct next step.
>
>
>
> Ballistix: Sales Process Engineering
> http://www.ballistix.com.au
> Yahoo! Groups Links
>
>
>
>
>

Nicos

Working on an unfiltered list is *only* a waste of time if the salesperson is
the constraint.  If he is unconstrained, this time has no value.

In many cases we will have the most basic research done by a dedicated
researcher, and then we will SORT *not filter* opportunities based upon their
likely Throughput Contribution per Appointment Slot Consumed.

So, in summary, filter out those prospects where there is absolutely no
potential and sort the rest.  Of course, we do this by sorting the Opportunity
Buffer and having the sales soordinator schedule the salesperson's time (build
his schedule) by simply drawing opportunities from the top of the list.

Justin

		 Working on an unfiltered list is a waste of time. If the list is filtered
according to some criteria that proved to be working, then qualification is the
correct next step.

Mark and Mike

A better analogy might be to compare one hen that tends lovingly to a single
egg, versus another that lays 10 and provides them all with basic care.

The issue is that the upside potential in the first approach is limited to one
chick (it's also likely the provision of care is likely to exhibit rapidly
diminishing returns).  The assumption is, that the chickens have the ability to
multiple eggs.

In reality, because many salespeople are so overloaded by non-selling activities
(everything other than business development appointments), they don't have the
potential to lay multiple eggs!

Volume and conversion rate aren't the only considerations, particularly in a
constrained sales process.

You also need to consider:

1.
	 Margin (which can be given away to boost volume).  That's why we always talk in
terms of Throughput
2.
	 Under-specification of solutions (which happens if the focus is on conversion)
3.
	 Unnecessary consumption of appointment slots (which also happens)

That's why we use Throughput/AppointmentSlotsConsumed as the salesperson's
metric.  It subsumes all these other factors.

Justin

I think this reasoning is sound enough when applied to the nominated
opportunity universe (i.e. immediate product sales), however I'd like to
see it exercised in other areas, like services.
For instance, this qualification process is not the qualification
process that we apply. Being a services organisation, with sales cycles
ranging from 2 - 12 months, doing so would be suicidal. Having adopted
the Ballistix relationship-centric model, our qualification is more
about removing prospects that we would be unlikely to do any business
with unless there was a dramatic change in either their business or our
business. E.g. their policy, size or technologies are incompatible with
us/our services. So our qualification is NOT about specific opportunity.
We have 2 qualification steps. Since it takes considerable effort to
establish a relationship, the first is simply to work out whether we
should spend the time courting senior management to a point where we can
get a meeting to present our services. The second takes place after the
first face-to-face meeting where we understand their needs, in which
case they are qualified as a relationship-high if there is opportunity
for a close, ongoing relationship, and relationship-low if there is
opportunity for a little bit work, but not a lot ongoing.
The reason for the first qualification is that getting the appointment
is our current constraint. To exploit this constraint we are trying to
remove the 'wasted production' by removing contacts that will definitely
be qualified out.

So, in terms of your question, I don't think there is a broadly
applicable answer. Instead, it depends heavily on the definition of
'qualification'. It also depends heavily on what you mean by 'qualify
out'.
Although I agree that to qualify out based on lack of immediate
opportunity is foolhardy, especially if they are permanently discarded.

Mike Smith
Managing Director
Simbient Pty Ltd

-----Original Message-----
From: ballistix@yahoogroups.com [mailto:ballistix@yahoogroups.com] On
Behalf Of Justin Roff-Marsh
Sent: Wednesday, 15 June 2005 6:55 PM
To: ballistix@yahoogroups.com
Subject: [ballistix] Qualification: value adding or value destroying?

I'm always bemused by the exalted tone used by salespeople and
management when discussing 'qualification'.

The presumption seems to be that this activity somehow adds tremendous
value to the opportunity-management process.  I suspect, in most cases,
it does the opposite!

From what I've observed, 'qualification' typically involves a
salesperson making preliminary contact with a list of opportunities to
determine which are likely to purchase in the near term.

Those that are are deemed to be 'qualified'; the balance, discarded.

Now, if this salesperson is also a project manager, an administrator, a
clerk, a PA and so on, I can understand his desire to devote time only
to those opportunities likely to convert in the very near future.

However, if this person's time is dedicated to the conduct of
business-development appointments -- which is what we advocate -- the
consequences of this approach are scary!

In filtering a list of opportunities to include only those with an
acknowledged, short-term interest in purchasing, the salesperson has
filtered-out prospects with a problem, but without an awareness of how
to go about solving it.

The remaining opportunities will be those that are more likely to be
price sensitive (they've already written their own prescription).

The salesperson has also telegraphed to all opportunities that the
organisation is the purveyor of a commodity product (and, consequently,
that his role in the process is to take an order).

As a result of this ongoing 'qualification' process, the salesperson
will interface *only* with price-focussed customers.

As a consequence he will form the firm opinion that all customers are
relentless price shoppers and that the key to maximising the return on
his limited time is to filter sales opportunities even more
aggressively!

Justin Roff-Marsh



Ballistix: Sales Process Engineering
http://www.ballistix.com.au
Yahoo! Groups Links






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Justine

I have been involved in many sales processes including the "churn and burn"
classification of sales managers. The most successful is developing business
relations incorporating trust and integrity and a long ongoing  relationship
which usually last over several yeas. Identifying business drivers and your
potential clients needs is paramount. So many businesses are focused on the
next quarter and if they haven't done their homework and marketing strategy
there won't be a next quarter so they try and catch up in the next quarter
after. No budget No plans Just marketing product. No seminbars  -but its too
expensive. I recently held a NSW State Goverment Seminar on "Information
Security in State Government" the conference attracted 22O senior management
in fact half of NSW State Government Departments. The cost was free and a 5
star event. It gave the corporation 220 leads for the sales department at a
cost of $22.000 when an individual sales lead from a salesman can equate to
$6000.

Develop business relationships and listen listen listen to business
requirements.


John Morrison
John Morrison & Associates
jcam1@...
02 9918 2397

----- Original Message -----
From: "Justin Roff-Marsh" <justin.roffmarsh@...>
To: <ballistix@yahoogroups.com>
Sent: Wednesday, June 15, 2005 6:54 PM
Subject: [ballistix] Qualification: value adding or value destroying?


> I'm always bemused by the exalted tone used by salespeople and management
> when discussing 'qualification'.
>
> The presumption seems to be that this activity somehow adds tremendous
> value to the opportunity-management process.  I suspect, in most cases, it
> does the opposite!
>
> From what I've observed, 'qualification' typically involves a salesperson
> making preliminary contact with a list of opportunities to determine which
> are likely to purchase in the near term.
>
> Those that are are deemed to be 'qualified'; the balance, discarded.
>
> Now, if this salesperson is also a project manager, an administrator, a
> clerk, a PA and so on, I can understand his desire to devote time only to
> those opportunities likely to convert in the very near future.
>
> However, if this person's time is dedicated to the conduct of
> business-development appointments -- which is what we advocate -- the
> consequences of this approach are scary!
>
> In filtering a list of opportunities to include only those with an
> acknowledged, short-term interest in purchasing, the salesperson has
> filtered-out prospects with a problem, but without an awareness of how to
> go about solving it.
>
> The remaining opportunities will be those that are more likely to be price
> sensitive (they've already written their own prescription).
>
> The salesperson has also telegraphed to all opportunities that the
> organisation is the purveyor of a commodity product (and, consequently,
> that his role in the process is to take an order).
>
> As a result of this ongoing 'qualification' process, the salesperson will
> interface *only* with price-focussed customers.
>
> As a consequence he will form the firm opinion that all customers are
> relentless price shoppers and that the key to maximising the return on his
> limited time is to filter sales opportunities even more aggressively!
>
> Justin Roff-Marsh
>
>
>
> Ballistix: Sales Process Engineering
> http://www.ballistix.com.au
> Yahoo! Groups Links
>
>
>
>
>
>
>

I'm always bemused by the exalted tone used by salespeople and management when
discussing 'qualification'.

The presumption seems to be that this activity somehow adds tremendous value to
the opportunity-management process.  I suspect, in most cases, it does the
opposite!

From what I've observed, 'qualification' typically involves a salesperson making
preliminary contact with a list of opportunities to determine which are likely
to purchase in the near term.

Those that are are deemed to be 'qualified'; the balance, discarded.

Now, if this salesperson is also a project manager, an administrator, a clerk, a
PA and so on, I can understand his desire to devote time only to those
opportunities likely to convert in the very near future.

However, if this person's time is dedicated to the conduct of
business-development appointments -- which is what we advocate -- the
consequences of this approach are scary!

In filtering a list of opportunities to include only those with an acknowledged,
short-term interest in purchasing, the salesperson has filtered-out prospects
with a problem, but without an awareness of how to go about solving it.

The remaining opportunities will be those that are more likely to be price
sensitive (they've already written their own prescription).

The salesperson has also telegraphed to all opportunities that the organisation
is the purveyor of a commodity product (and, consequently, that his role in the
process is to take an order).

As a result of this ongoing 'qualification' process, the salesperson will
interface *only* with price-focussed customers.

As a consequence he will form the firm opinion that all customers are relentless
price shoppers and that the key to maximising the return on his limited time is
to filter sales opportunities even more aggressively!

Justin Roff-Marsh

...and looking forward to discussing sales process issues with the
group.

Jeff

www.stageonepartners.com
jmorrison@...

In recent times, we've developed a new approach to Account
Management activities within the sales process.

This approach -- while in use within a number of clients'
businesses -- has not yet yielded conclusive results, however
leading indicators are positive and we are optimistic (as are our
clients).

I thought I'd preview it here in case it is of interest -- and in
case anyone spots issues we may not have considered.

Some context ...

We classify Account Management activities as those visits between a
field representative and a client where there is no prospect of a
sales opportunity.  (If there were, we'd classify this as
Opportunity Management.)

An example is a channel rep who calls on resellers, with the
intention of optimising reseller sell-through.

Traditionally, such reps are held responsible for reseller sell-
through, in dollar terms.

The problem is, they are not in a position to *directly* influence
this.  For example, road works outside a reseller's premises might
negatively impact on sell-through, and result in the account
management rep's numbers looking bad.

Our approach has been to ask what exactly it is that the account
management rep is supposed to influence.  Our suggestion is that he
should be influencing the reseller's compliance with what we're
calling an Ideal Conditional Set -- where the (objective) parameters
of this condition set are defined by management.

For example, this Ideal Condition Set might specify things like
reseller's staff training (level achieved and recency), product mix
and volumes (relative to store size), point of sale materials,
staffing levels, operational procedures, etc.

For each category of reseller, our clients are building an profile
that specifies optimas for each of these parameters.

On each visit, reps are then expected to work with the reseller to
assist them in moving towards full compliance with this profile.
They are also expected to audit current compliance (using a simple
checklist).

The results are tabulated by reps' sales coordinators and the
reseller's compliance with the optimal condition set is
automatically calculated (as a percentage).

We are then holding reps responsible for their ability to migrate
their accounts to full compliance.

Accordingly, we are holding account management reps responsible for
the change in Condition Set Compliance, relative to the number of
appointments conducted.  (DeltaCSC/AppointmentSlotsConsumed.)

(Obviously, this assumes that salespeople are the constraint, and
that their unit of constraint is Available Appointment Slots.)

Please comment.

Justin Roff-Marsh

Welcome to the Ballistix list: the forum for the discussion of our
approach to the sales process and the Theory of Constraints (TOC).

Justin Roff-Marsh
Moderator