Harnessing the Power of Incentive Management

2007-11-14 17:23:39 By Rob Blakey Source: http://www.accenture.com

As communications and high-tech companies turn their attention to new growth strategies, they are being hindered by sales operations, as well as supporting processes and tools, which have not kept pace with changing market conditions. Accenture's ongoing research into the characteristics of high-performance businesses notes that "distinctive capabilities" are one of the critical building blocks of high performance. When it comes to sales capabilities, many companies are running up against process and technology barriers that are preventing successful alignment of the sales organization with strategies, plans and selling behaviors. Ultimately, these barriers are a drag on efficient, profitable growth.

In today's more complex selling environment, new behaviors are needed from the sales force. Solution selling, for example, requires better collaboration across functions, and a focus on new kinds of buyers. Yet if incentive programs are not aligned with those needs, companies should not expect behaviors to change on their own.

The sales tools on which companies have long relied to devise and administer incentive compensation plans are not adequate to meet today's business environment. Incentive compensation administration is often cumbersome and error-prone because many companies rely on inadequate homegrown technology applications or spreadsheets.

In addition to being hard to adapt when market conditions change or product lines evolve, these systems often result in higher administrative costs, decreased productivity and lost sales force confidence in the overall incentive compensation process. Changing customer demands require more agile sales strategies and far more flexible incentive management programs.

Our experience suggests that a new approach to incentive management can remove the barriers preventing the sales force from performing in optimal fashion and, in the process, transform an incentive compensation plan into a tool that truly influences the sales force behaviors needed to realize business strategy. Effective incentive compensation capabilities can:
Give companies the flexibility to respond to rapidly changing market demands and to quickly implement new sales strategies and plans. Enhance the productivity of the sales force productivity by increasing their confidence in the incentive program.
Support the most effective selling behaviors with leading-edge technologies and tools.

To reinforce desired sales force behaviors and support the drive to high performance, incentive management capabilities must clearly demonstrate to sales people the link between what they do and what they earn. Only when sales people can make an explicit connection between their paychecks, the compensation plan and, ultimately, the company's sales and corporate strategy, will their selling behaviors more consistently align with desired sales strategies.