Over Thanksgiving, my 23-year-old son was explaining the difference between the two private high schools he attended. He said a typical day at the first school went something like:
Break
Class
Study Hall
Lunch
Break
Class
Lots of free, unstructured time.
At his second high school there were seven forty-two minute classes with four minutes between each class. A lot of structure.
School #1 was great for teens that were motivated to learn, independent, disciplined, self-starters. School #2 was great for kids who needed structure.
From High School to High Performing Salespeople: The SCAM
Sales is very much the same in that both groups of teens grow up and some eventually become salespeople. The country song would be “Mamas, Don’t Let Your Babies Grow up to be Salespeople.” The sales profession has both: motivated, independent, disciplined self-starters, as well as those who require structure.
We also have both kinds of companies: Companies where the culture requires all of their salespeople to be motivated, independent, disciplined self-starters, as well as those where the culture is extremely structured and salespeople are micro-managed with lots of busy work like KPI reports, call reports, account plans, territory plans, etc.
The problem is that the culture in most companies doesn’t allow for both types of salespeople.
The unstructured Culture (#1) says, “They’re salespeople – they’ll know what to do.” The structured culture (#2) says, “They’re salespeople and they need to be closely managed.” An example of a solution for this is where group 1 might be required to join a weekly huddle, turn in weekly reports, and update their CRM application each week, while group 2 might be required to participate in a daily huddle, be responsible for daily KPIs, and enter daily opportunity updates in their CRM application.
Let’s call what we are discussing the Sales Culture Alignment Measure or SCAM for short. It runs parallel to the nearly identical problem we have with sales compensation plans. In the case of sales comp, there are four basic plans:
| Plan Type | Best For |
|---|---|
| All Commission | Confident Extrinsic hustlers |
| Mostly Commission | Balanced or Extrinsic chasers |
| Mostly Salary | Intrinsic grinders |
| All Salary | Intrinsic worriers |
Like the SCAM, not all salespeople find alignment with all comp plans. Salespeople that are extrinsically motivated will thrive on a plan that is all or mostly commission. Salespeople that are intrinsically motivated will thrive on a plan that is all or mostly salary. Extrinsics chase the money; intrinsics grind for the win. Read this article on Changing Motivational Needs.
Consider the example where the commission-dominant salespeople get to maximize their plans based on gross profit as a percentage of goal, while the salary-dominant salespeople are paid a quarterly or year-end bonus based on the same achievement.
Sadly, companies tend to love their one size fits all plans, despite the fact that they will only work effectively on half the salespeople, increasing the odds of a candidate not wanting to work for them. Worse, if the salesperson is desperate for a job, they may accept an offer despite the plan not aligning with their needs. That leads to early, involuntary turnover.
So as not to confuse people with identical acronyms, let’s call the compensation contradiction Sales Compensation Alignment Reality, or SCAR.
The executives in the C Suite, along with sales leadership, should discuss their current SCAM and SCAR and agree to offer two options instead of one. It will improve recruiting effectiveness, incentives, performance and retention.
If you need help getting these plans right, feel free to contact us!
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