Jon Clark, Director Strategy Services, EMEA, Opensymmetry, presentation to E-reward conference | 12...

E-RewardGreat Plan Design and

Successful Implementation12 May 2016

New Incentive Plans – What’s the Weather?

“ABILITYis what you are capable of doing

MOTIVATIONdetermines what

you doATTITUDE

determines how well you do it”

What Does Great Look Like…

Motivated Salesforce who believe they will earn commission

High retention of top salespeople

Streamlined, accurate, cost effective process

Accurate, dynamic, transparent performance reporting

Consistent and predicable sales growth

What type of business are you?

What is your sales strategy?

What are your business objectives?

What culture do you have?

What are your competitors doing?

What sales behaviours do you

What other external pressures are you

facing?

How are your customers buying

preferences changing?

Do you have the ability to

operationalise plans?

How stable is your sales organisation?

What plan design experience do you

Can you manage change?

But… You Face A Complex Challenge

Typical vs Right

ResponseSESSIONFOCUS

What Great Design Looks

Cost of Getting Design Wrong

Implementation

Making It Happen

Getting an agreed plan design launched on time

Managing with no or inflexible technology

Achieving effective, consistent processes

TYPICAL RESPONSE RIGHT RESPONSEMaking sure plan design is

driving the behaviours to support strategy

Having dynamic, flexible

technology

Optimising processes to support successful plan design delivery

Cost Impact of Getting It Wrong

Process DesignOperationsPlan Design

No behaviour change, demotivated salesforce – lost

performance upside5-10% revenue increase

High implementation cost if plan design too complexDelayed implementation

2x implementation cost and timeline

Don’t realise admin resource savings50% of FTE cost

Benefits of Getting It Right ……

Seamless

Flexibility

Transparency 2X37%

Shorter Sales Cycles36%

25%More Sales

Reps Making Quota

Quicker Sales

Lower Turnover

Faster Growth

Principles - Based Approach GREAT DESIGN

Robust Design Process

Design to Facilitate Operations

Diagnostic Review Design Impleme

Designing for Success

Principles-Based Design

MotivationalBehaviouralOrganisational

Link to Company GoalsMeasurability

Flexibility

Role AccountabilityTeam Alignment

Simplicity

Pay For ResultsSignificant Opportunity

Pay Differentiation

What Does Great Design Look Like?

A few may make it, includes new starters

• More frequent targets/incentives

• Social Pressure

The group that can best move

the needle

• Tiered commission

• Prizes

Will always beat target

• Overachievement incentives

• No caps

Low Performers

Core Performers

High Performers

Beware Negative ConsequencesDesign Feature Unintended ConsequenceMonthly quota with accelerator Sell every other monthIncentive based on customer satisfaction Seek satisfaction at the expense of salesPaid primarily on market share Actively reducing territory sizePaid primarily on sales Actively enlarge territory at expense of

colleaguesPaid primarily on units Discount away profit marginTeam incentive Relax and let others do the workCapped payout Hoard sales that would exceed the capComplex plan Ignore the planManager determines objectives and exercises judgement on objective achievement

Spend too much time influencing the manager, not the customers

Very high incentive element Sell at all costs even to customers who don’t need it

Very low incentive element Ignore the plan

Quotas and

TerritoriesTechnolog

Incentive Design

Successful Implementation

Technology Gives You a Competitive Edge

Performance Visibility● Sales Rep can

calculate commission outcome

● Sales Manager can focus coaching

● Execs make the right strategic calls

● Accurate payout

● Fewer disputes

● Focus on selling

● Reduced admin costs

● Reduced compliance risk

● Flexibility to adjust

Selling Focus Reduced Risk/Cost

What is Your Next Move ?

technology purchase

The OS Roadmap takes youfrom uncertainty to opportunity

selectplanevaluate implement adopt transform

that’s the advantage

tyopportunity

What I Want What I Expect What I Need● Plan Design● SPM Current State

Assessment● Future State Roadmap● Implementation Readiness● Business Case

● Software Selection● Implementation Planning● Deployment● Change Management

● Business Operations● Technology Support● Process Optimization● Transformational Outcomes

1. Understand the Challenge

2. Ensure Effective Design

3. Invest in Technology

ContactInfo

Jon ClarkStrategy Services Director EMEAjon.clark@opensymmetry.com+44 (0) 7768.558771

from strategy to success.

the PROBLEM

Pharma & Medical Devices Case Study

theSOLUTION• Plan Design Framework to

accommodate all roles• New Territory Alignment• Quota Setting to provide realistic

challenge

Providing research, development, production of bio-tech and pharmaceutical drug therapies.

• Needed to adapt to changing market and customer landscape

• Shift to a customer driven focus and team behaviour

• New sales organisation

How Design Impacts Implementation ChallengeNumbers of Plans Complexity Lack of Future

Proofing• Different plans

for different roles

• Additional inclusion of MBOs

• Large Number of Additional Spiffs

• Too many plans

• Too many metrics

• Complex rules and dependencies

• Lack of plan framework

• Inflexibility

• Inability to Swap Metrics In/Out

• Different Data Sources

Technology Can be Complex!?

Jon Clark, Director Strategy Services, EMEA, Opensymmetry, presentation to E-reward conference | 12...

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Transcript of Jon Clark, Director Strategy Services, EMEA, Opensymmetry, presentation to E-reward conference | 12...

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