Life is full of leaderboards of all descriptions.
Facebook documents the seemingly fantastic things our friends are doing around us. As does Instagram. Pinterest allows us to bookmark the things we aspire to own or believe. More often we are measuring our accomplishments on a digital leaderboard against our peers in some form.
Sales isn’t any different – we have leader boards galore in our industry given the metric rich environment. Sales is often viewed as competitive and thus the sales leaderboard was borne out of sports.
Sales leader boards can lead to the same issues of jealously, anxiety and self worth that social media is generating in our social lives. Is it time to question the value and use of the leaderboard as a sales leadership tool?
Some questions to consider with sales leaderboards:
Who are they competing with?
It most situations sales leaderboards are used, staff aren’t in competition with one another. They aren’t competing with one another for sales – but imposing a leaderboard can have this outcome.
Unlike sport, sales isn’t about winners and losers internally – it is about client value. Sure, the business needs to measure the cost and return of sales activity but is framing it as a competition productive? Are you really competing with the sales people on the desks either side of you? Or are you better to be working together to maximise value to your clients?
Treating sales as an internal competition can have negative consequences, often for the client. It can result is selfish rather than selfless behaviour. It can cause you to lose sight of your client in lieu of winning. It can cause you to focus short rather than focusing long.
Be careful with leaderboards as it can drive the incorrect competitive behaviour, focusing inward rather than outward.
What are you measuring?
Are you measuring the right variable? You need to be careful here are likely to get what you measure, so what you measure better be right. For example, many businesses will measure the ‘value’ of a sale on a leaderboard, but few measure client satisfaction. Those measuring the value will suggest that this is a proxy for satisfaction as the results wouldn’t be repeatable if the clients weren’t happy. But this only plays out if you are selling to the same clients repeatedly.
Leaderboards naturally focus sales teams on what is being measured – especially if this ties in to their KPI’s and remuneration. Many leaderboards focus on quantitative factors because they can easily be measured. Qualitative factors are seldom measured – so care needs to be taken when selecting the variables you are measuring to ensure they don’t negatively affect these qualitative factors.
Be careful with selecting which variable(s) you measure on leaderboards as it is highly likely your team will focus on these and only these.
Is it demotivating some of your team?
Not everyone in your team will be motivated by a leaderboard. The naysayers may suggest that these are likely to be those labouring at the bottom. However, some successful sales people who will likely be at the top of your leaderboard may similarly be demotivated or embarrassed. Consider the scenario of a highly successful sales person who is continually at the top of a leaderboard and lauded as ‘the best’ – their social circle at work can be affected by being pedestalled by their boss. This could cause them to ease off to lower their head below the parapet. You may be surprised, some successful sales people prefer to be quiet achievers rather than see their name in lights.
Be careful with leaderboards to ensure you know how your team is motivated and demotivated by them.
Who is it for?
Many leaderboards are imposed for management rather than the sales teams benefit. They are used to identify where performance management is required, not to celebrate success. This is often typified by the ‘red line’ where success or failure is determined. Leaderboards are often about showing those who are ‘contributing profitably’ to a business, not simply ranking performance.
Because of the often ‘negative’ use of the leaderboards to identify poor performance, leaderboards are often viewed skeptically by the sales team. They are seldom considered a positive thing. Your top performers often ignore them as they will perform anyway and the poor performers rue them.
Be careful as leaderboards should be about identifying, replicating and sharing excellence, not as a stick to punish poor performance.
What about attitude?
Most sales leaders could identify their top performers and their bottom performers without a leaderboard. As could most of the people in the sales team. What leaderboards don’t measure is attitude. Your top performers will likely be at the top of a leaderboard regardless of whether there is one or not. Why? Because they aren’t competing with those around them, they are competing with themselves.
However, you can have high performers with poor attitudes – who sell for selfish reasons but are successful doing it. Similarly, you can have poor performers against your metrics who have fantastic attitudes. Attitudes have a significant impact on their ability to be lead/managed and future performance.
A leader board can quickly change attitudes. It can drive the top to be selfish and erode the good attitudes of those at the bottom.
Be careful as a leaderboard can affect not just the outputs of your sales team, but also their attitudes, but they don’t measure them.
The top is often forgotten
With leaderboards most sales leaders focus their efforts on increasing the performance of those at the bottom. In doing so, whilst the should/do congratulate those at the top, they often don’t invest the same amount of time in increasing the performance of those at the top. The top often gets forgotten. Yet there is plenty of research suggesting you run the risk of losing your star performance due to lack of opportunities to grow or assume more responsibilities
A leaderboard also doesn’t show you ‘why’ a person is performing. You can have someone at the top of the leaderboard who obtains results simply through being in the market long enough, yet you can have another sales person in the middle of the leaderboard who is new but tenaciously hunting down new business. You can’t take the results as absolutes – leaderboards aren’t an excuse to not drill down further and discuss why results are occurring. This is something that can be forgotten amongst your top performers.
Be careful with leaderboards that you don’t focus wholly on the bottom at the expense of ensuring the top performers are also being developed, grown and stretched.
Better or best
A leaderboard often sets a minimum, rather than maximum performance expectation. The bottom is often clearly defined in sales as 0% and the minimum is usually set as the level of business that the business expects for the role, but the maximum is seldom defined. What then can happen is sales people can aim just to be ‘off radar’. They aim to not be in the bottom 2 quartiles and sit in the top 2 quartiles. They aim to be better than the bottom half, but not the best they can be. You run the risk you normalise sales performance by defining the minimum expectation. Just stay ahead of the bottom and you’ve succeeded.
Sales people should be ‘competing’ with themselves to improve their sales performance. To become the best they can be. Not competing with others.
Be careful with leaderboards that you are still leading your team to be the best they can be, not just above the minimum expectations of the business.
Sales leaderboards can and do work; however the above is to help identify where they can become a negative influence on work, attitudes and engagement levels.
But the question really is – do we need sales leaderboards?
- If you as a sales leader can accurately predict where your sales team will fall on a leaderboard, do you?
- If you have robust KPI’s to measure your sales team and individuals against, do you?
- Do you wish to pit your sales team in competition against one another?
Many businesses forget or under-communicate the best leaderboard they have. The one that the business’ shareholders discuss. The most meaningful leaderboard. The one that ensures everyone in the business is pointing in the right direction.
The Best Leaderboard?
When watching sport, do you see a leaderboard showing one team members performance against their team mates? No, you see which team is beating which.
When playing, you play as one team. It isn’t an internal competition. It is about beating your opponents. Yet why in sales do we measure internal competition?
There is one leaderboard every business should be have prominently displayed in their business but few do. Market Share.
This is the competition. This focuses you on the real competition – the fight to win your clients business and loyalty. This is what should be galvanising the business, sales teams and individual sales people to perform.
Leaderboards measuring sales activity and behaviours are important and crucial to structure correctly and, much like the stats kept in sports, allow you to improve performance…however market share data is the win/loss column.