It’s that time of the year again. With many tech companies now on a 1/31 fiscal year end, that makes February kickoff month. So it’s a time to say “thanks” for a great last year, but also to move quickly on to launching the new year. Every week lost costs you 1.9% of your FY12 selling days. While that may not seem like a lot right now, trust me it will come end of the year.
Thus February is a month that requires great operational discipline. I’ll tell you a story about my old friend Larry to explain why. For the first few weeks of every year Larry would stroll into the office around 10 AM with a few different newspapers in his hands. Then he’d sit in his office, with his feet on his desk, and quite visibly read the newspaper. If you went into his office and said, “Larry, what the heck are you doing?” he’d reply:
“I’m reading the paper because I don’t know what to do. I haven’t received my compensation plan yet.”
Larry was lucky not to get fired, but his management was lucky to have him around to make the point so dramatically. I am a salesperson. I am, by definition, coin-operated. My compensation plan is supposed to be *the* definition of the behavior the company would like to incent in the new year. So, if I haven’t received my comp plan, then I don’t know what to do. QED.
I learned a simple trick from my old boss John Olsen to help your thinking when it comes to the timing of comp plans:
Your signed compensation plan is your admission ticket to the sales kickoff.
This is a fantastic rule for many reasons:
- It forces management to reverse-engineer the timeline to get things done early. Making comp plans (and dividing territories) is hard, iterative work that takes time. Most salespeople want to negotiate certain terms, which adds time as well. By putting this stake in the ground you are committing to starting early.
- It creates a deadline. Comp plans often linger for months into the new year and while most salespeople won’t overtly act like Larry, they may well be operating at reduced productivity until they understand what they’re supposed to do.
- It lets kickoff be a real beginning. Sales reps enter the room with your comp plan and territory. They hear great things about last year. And they hear what’s coming this year in terms of new products and new go-to-market strategies. So when reps get home, they can start selling.
So have a great kickoff. Fire up your salesreps about what a great year they’re going to have. Send them home with new messaging and tools. Whip them into a frenzy. But, please don’t let them into the event unless they’ve signed their comp plan. And make sure you’ve done work on your end, in advance, to make that a reasonable request.