Do you have your instrument flight rating for your business?
- Thom Mead
- On October 7, 2016
Every pilot/flight trainee knows the importance of trusting what the plane’s cockpit instruments are telling them. With very rare exception, the cockpit’s instruments don’t lie. What’s happening to the plane can be counter-intuitive to what your human senses are telling you. I can recall several instances in my flight training when I had to fight my senses (and fear) and rely on the data in the cockpit as my only gauge of what was actually happening and what I needed to do to get the plane to back to straight and level flight.
Today, the ‘pucker factor’ is not quite the same as when I was learning to fly. Now, recovering from many potentially dangerous situations can be practiced in a flight simulator. When I was learning to fly, we did not have simulators. We had to recreate the adverse conditions while actually flying, and then practice recovering from them. There was no ’reset’ button. For example, to learn and practice how to recover from a stall, we first had to put the airplane into a stall. Okay, I’m dating myself here.
The terrorists who flew the jet airliners on 9/11, practiced on simulators run on their desktop PC. When I was learning to fly, Pong and Pac Man were cool new technology. For the non-aviators reading this, when a plane ‘stalls’, it does not mean the engine stops as it does when a car or boat stalls. In aviation parlance, simply put, a stall refers to there not being enough air flowing over the wings to sustain lift. If air is not flowing over the wings, the controls become unresponsive, causing you to lose control of the plane…and you begin to free fall. When the plane is spinning, falling from the sky and the horizon is nowhere to be seen… It is no time to trust your human senses.
To recreate this environment, a flight student dons a “hood”, a device that looks similar to a welder’s facemask. The difference is it does not come down. It is designed to disable your natural tendency and ability to look outside of the cockpit. Other, more recent versions are smaller and look like blinders that a race horse wears. This forces you to develop the discipline to look only at the instruments in the cockpit. The same is true if you are flying in heavy fog, driving rain, late at night over the water, or trying to find and land on an aircraft carrier hundreds of miles from land in the middle of the night.
So when your business is not performing properly, sales are sluggish, revenues and profits are down, do you have your Instrument Flight Rating (IFR) for your business to recover and get the ship righted? Surprisingly, many of the insurance companies I have spoken to in recent months do not even have the basic ‘systems’ in place to quickly and correctly recover, much less the instruments to inform them of what is happening and what needs to be done, and when. Some companies have some of the systems and corresponding instruments in place, but it can take weeks, even months, to get a ‘reading’. Others installed a hodgepodge of systems over an extended period of time, and they work okay… in isolation. The problem is they are islands of excellence and often don’t play well together. Such disabled performance invariably leaves you in peril… whether in a plane or in business.
Most of my 25 years in business have been in strategy, marketing and business development, for large global companies, so I will focus this article to these functional areas. Increasingly, companies are adopting varied technologies to monitor performance across the enterprise. Surprisingly, many are lagging well behind when it comes to upgrading and enhancing their sales operations, the true, and often unseen driving force behind sales success. Revenue and profit is to a business what airflow is to an airplane. Airflow = cash flow. Sales is the engine, and comprehensive, integrated, real-time sales operations systems and processes are the functional equivalent to the avionics of an airplane.
One large insurance company SVP was discussing with me their challenges with portfolio management, a sales planning activity. They had introduced an industry-leading insurance product a few years earlier. Their incentive compensation plan was driving the salespeople to sell more of this new product… a money-losing product… in the belief that it would become profitable if they had more volume. Three years later, more volume only meant greater losses. But they could not acquire the data and the subsequent intelligence to take corrective active quick enough. In a similar way, the internal processes to take corrective action were also slow and outdated. The losses were huge.
Sales planning is too often approached with very broad brush strokes, with more emphasis being on sales forecasting than planning specifically how to achieve the numbers. Merely defining a financial goal is like a New Year’s resolution to lose weight and get in shape. How you get there is critical to your ability to meet your goals. Drilling down into a sales territory, one needs to get down to the salesperson specific level, to the product specific level, to ensure performance can be truly understood and uniformly improved. Is the lack of sales of a particular product by a salesperson the result of a lack of training, lack of interest, poor compensation structure, an underwhelming sales manager or other factors. If it takes two to three months to pull together the information, assess the situation and develop a corrective course of action, that’s two to three months of lost opportunity, minimum. Is their performance down because their commissions are not being paid accurately and timely and the agents are understandably demotivated? Do your top performers and your bottom performers really need the same training? Should their compensation plans be identical or more tailored to drive behaviors that lead to selling the balanced portfolio that leads to better business performance? By applying IFR disciplines in your business, you can drive better outcomes … by design.
Just as it is important that all the controls in the cockpit be installed, connected and work correctly, the same is true of the systems and processes underlying your sales operation: CRM, Incentive Compensation, Quota Setting, Objectives Management, Sales Planning & Forecasting, Sales Performance Management, Learning Management Systems, Licensing, Accreditation, and onboarding to name just a few. What gets measured get managed. Getting them to work together, seamlessly, reduces costs, eliminates errors and makes real-time data analysis possible, enabling better and more timely decision-making. Ideally, doing this on a single, fully integrated platform should be the goal, to eliminate points of failure and to get better information faster. Getting there does not require legions of consultants doing six months of requirements definition, another six to twelve months of an RFX process, and then 12+ months to implement a software-only solution that will take months or even years to see a return on investment (ROI). This approach, the default process in the market, results in doing the wrong thing exceptionally well. Done correctly, you also don’t need to build a data warehouse since you should be able to access your own production data and develop a ‘sandbox’ that runs in parallel. If you are spending more time, money and effort managing how you get the data and transform it into information, then you need to rethink your approach. The Marine Corps pilot does not try to fix or calibrate the cockpit instruments while flying. If your sales operations are structured and operating correctly, you are spending the bulk of your time managing the information (not manipulating the underlying data) to make fully informed decisions and taking fact-based actions to get better business outcomes. It is important to do what you do best and team with others who do what they do best. The pilot of an F4 Phantom or F/A 18 Super Hornet flies the plane. With him/her in the cockpit, in the “second seat” is the RIO (Radar Intercept Officer). Their role is to man the vast array of complex, high-tech weapons systems to ensure they hit their target. They work as a team. Supporting them on the ground are the aircraft maintenance and avionics technicians (your sales operations team) who ensure the plane does all it is capable of doing so the pilot and RIO can do all they are capable of doing.
I am a big believer in the KISS principle. Improving sales, while also increasing profits and realising better ROI from your investments in sales and sales operations need not be a Cecil B. DeMille production. If it is, then you are doing it wrong. Having the ability to transform data into information and then into knowledge is a management activity that can be done internally, automated, or it can be outsourced. It is an activity that requires the deft management of technology, experienced people and the application of best practices to get the optimal results. However, as a management activity, it should be considered a basic hygiene factor, expected of any business. But management is not leadership. Developing, massaging and managing data, spreadsheets, pie charts, and quotas is not the goal. Done correctly, these activities can, and should, be automated, completely integrated, and their effectiveness, made easily visible and accessible. Leadership is having the courage to make the change, to stop following the pack, and instead, be the one who challenges the status quo, and sets the pace. Do you want to keep your sales from stalling? Take the first step by overhauling and upgrading your sales operations. It will be like transitioning from a Cessna 150 to an AV-8B Harrier.
Is your company fighting today’s battles with yesterday’s technology and training? Is your company encumbered by systems and processes that are seriously outdated, ineffective and inefficient? Do you have the courage and intestinal fortitude to be a leader – to be the champion for dramatic change in your company? If you answered yes to even one of these questions, then it is time to get your ‘Instrument Flight Rating’ for your company so you can focus on the mission and pilot your company to sales success.