The Advent of Sales Planning Natives: Why “Set It & Forget It” No Longer Works

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Generational studies and paradigms capture the interest of theorists, sociologists, and writers, and more recent research has examined implications of generational influences in workplace skills, motivation, and management. Several years ago, significant analyses were placed on millennials—more specifically, their generational commonalities, tendencies, and needs in the work force.

However, in the past couple of years, the focus has started to shift to the next generation, Gen Z, as they enter the workforce. One of the interesting narratives around this generation is their label as “digital natives”—born into a world of smartphones, social media, and near-instant accessibility of information. They are the first generation to have never known a world without technology like the internet.

With the rapid advent of Anaplan’s Connected Planning, a time will likely come, although we aren’t there yet, where we will have “Connected Planning natives”—individuals for whom dynamic, Connected Planning processes are as normal as smartphones are to us today.

To understand the world that Connected Planning natives will operate in, it’s helpful to understand how planning happened in the past—and still happens frequently today. This shift will have an impact across many key business functions, but we’ll focus on sales planning specifically as an example and use three of the most common elements present in sales performance management: quota setting, territory management, and compensation.

In the early stages of using technology for territory planning, the focus was on building better territories and optimizing coverage around customers and opportunities—a process that could take weeks if not months. After the territories were designed, they were also delivered as an input to the compensation process, first to help in quota setting and second to support sales crediting.

For companies that set quotas for their sales force, this process could also take months, depending on a variety of factors, including when territory designs were complete, the availability of sales data, the time required to determine the quota setting methodology, and the inclusion of a refinement process. The time required to set quotas from start to finish has shortened as tools became available to help with this process, but quotas are still often set and communicated as an input to a compensation calculation process—after which time, companies would cross their fingers, hoping things didn’t change.

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But sales forces are not static organizations, and these sequential processes to design territories and set quotas quickly became problematic when faced with the need for more fluid changes. Territories could change—customers could merge or close locations, sales people could quit or go on leave, competitors could enter or leave the market—and the base foundations that helped shape the quotas could change with them. Sales people were vocal in their concerns: “My quota is no longer fair!”

Companies struggled in these situations. Their processes were designed under the assumption that, once set, they would be locked in for the quarter (or plan period). Companies wanted to “set them and forget them”, so the prospect of resetting quotas to account for changes in territories was daunting. After all, it took months for the process to happen the first time.

But then, two things happened. First, companies began to change their processes. Rather than linear and lengthy design processes, organizations began to look at processes as agile and on-going. Second, and more importantly, technology advances allowed these more integrated and seamless processes. In the past, separate tools existed, and file transfers between them were manual. As technology improved, separate tools still typically existed, but they were starting to be connected through backend integrations.

However, truly connected sales planning is only now starting to become a reality. Tools like Anaplan allow us to move beyond the need to integrate point solutions. By virtue of its platform design, Anaplan allows companies like ZS to build assets and accelerators that can enable a truly connected planning process. Territories are now used as inputs to design robust, quantifiably validated quotas that feed into the compensation calculations. As territories change, the inputs change, and so too do the quotas, automatically updating the payouts. What was just recently a tedious, even resented, change has now become an effective tool to keep pace with a dynamic customer and organizational ecosystem and deliver fair, motivational quotas and payouts.

This evolution is happening now, but some companies are not yet “connected sales planning natives”. Is yours?

Steve Marley, Principal at ZS AssociatesSteve Marley, Principal at ZS AssociatesSteve Marley is a Principal at ZS Associates in Evanston, Ill., and a member of ZS's sales compensation leadership team. Steve holds the Certified Sales Compensation Professional (CSCP) designation and has more than eight years of sales compensation consulting experience spanning a variety of industries, including software, distribution, financial services, non-profits, pharmaceuticals and medical devices. He has helped companies design effective compensation plans, set motivating quotas and implement efficient compensation administration programs.

Steve is a regular speaker at compensation conferences and the author of several articles regarding quota setting and plan design. He holds a bachelors degree in psychology from the University of Waterloo and an M.B.A. with distinction from the Richard Ivey School of Business at the University of Western Ontario.