Making Your Number

Making Your Number

Submitted by Njia on November 22nd, 2009 at 11:46 AM
Over my 20-year career, I've had many roles for the companies that have employed me. One of those is "Salesman". Now, few people carry the title, "Salesman" these days, and not just because the role is co-ed. We're "Account Executives", "Territory Managers", etc. In other words, "salesman" and "sales rep" just don't sound big and important enough. But, they each have one thing in common: quota. Friends and I used to joke that we were on perpetual, one-year contracts. Make the number, and we get to keep our job. It matters not whether the economy sucks, the product is inadequate, or the competition is fierce.

Sales managers, and other people for whom salesmen work, like to say that "making the number" is not the only thing that's important when measuring annual performance. They'll point to the size of the funnel, the number of deals, how many calls (whether in person or by phone) have been made, proposals generated, etc. And, to a large degree, that's all true. Considering that in many businesses, including mine, less than about 5% of all leads generate a sale, the entire game boils down to those other metrics. But, at the end of the year, (in some companies, much earlier) the sales manager is going to have a serious conversation with his or her reps about whether quota will be or has been made. If you work for a company like Oracle, you get about one calendar quarter of "grace period" before the cash register had better start ringing. Often. Larry Ellison is not a patient man, and that attitude is pervasive in the Oracle corporate culture.

Its not for nothing that so much pressure is placed on sales people to make quota. People's livelihoods are at stake, and not just the sales rep's, or the executives. Most sales people, unless they truly work for themselves, are well aware of the responsibilities they shoulder. One of my favorite jokes about sales in the last 10 years was a send-up of Jack Nicholson's fiery tirade on the witness stand in A Few Good Men:

Sales: “You want answers?”A few good men

Finance: “I think we are entitled to them!”

Sales: “You want answers?!”

Finance: “I want the truth!”

Sales: “You can’t handle the truth!!!”

Sales (continuing): “Son, we live in a world that requires revenue. And that revenue must be brought in by people with elite skills. Who’s going to find it? You? You, Mr. Operations? We have a greater responsibility than you can possibly fathom.

You scoff at sales division and you curse our lucrative incentives. You have that luxury. You have the luxury of not knowing what we know: that while the cost of business results are excessive, it drives in revenue.

And my very existence, while grotesque and incomprehensible to you, drives REVENUE! You don’t want to know the truth because deep down in places you don’t talk about at staff meetings … you want me on that call. You NEED me on that call!

We use words like comps, migration, discounts, flex licensing, global purchase agreements, up-sell. We use these words as the backbone of a life spent negotiating something. You use them as a punch line!

I have neither the time nor inclination to explain myself to people who rise and sleep under the very blanket of revenue I provide and then question the manner in which I provide it. I would rather you just said “thank you” and went on your way. Otherwise I suggest you pick up a phone and make some sales calls. Either way, I don’t give a damn what you think you’re entitled to!”

Finance: “Did you expense the lap dances?”

Sales: “I did the job I was hired to do.”

Finance: “Did you expense the lap dances?”

Sales: “You’re goddamn right I did!”

I think the sales profession is a useful analog for determining whether Rich Rodriguez is making progress with the team. While "sales funnel" and "deals closed" makes no sense in football, other indicators beyond wins and losses can demonstrate whether the program is moving forward or backward.

For instance, if superior talent generally wins the most ball games, then we need to look at his "pipeline" of recruiting classes as one indication of whether he's "doing the right thing," and can be reasonably expected to return Michigan to national prominence. Scouts Inc. reports that of the 20 verbal commits for UM's 2010 class, there are five 4-star, fourteen 3-star, and one 2-star prospects. Only one (Devin Gardner) is in the top 150 in the nation.

Compare these numbers to Ohio State's current 2010 verbals: seven 4-star, five 3-star, one 2-star. While there are only thirteen commits, four are in the top 150, and two are HS All-Americans. The Penn State 2010 class is just sickening. Among Joe Pa's 20 commits, there are 11 four-star, and nine 3-star prospects. Eight are in the Top 150, and there are four HS All-Americans. Of the eight in the Top 150, six play defense, including all of the All-Americans.

Its clear from reports on this board, as well as what I've read from Sam Webb, that Coach Rod is focusing like a laser on 2011 and beyond. We have one verbal for 2011 already, a CB, who is among the ESPN Top 150 (rated by Scouts Inc.). Those are very positive signs that the "funnel" is reasonably healthy. However, it will have to improve to consistently compete with OSU, USC, Florida and others. We won't know that for another 2-3 years at least.

However, talent is only one indicator. Penn State's recent classes (excepting the 2010 verbals) have not been especially awe-inspiring, yet they have put together two respectable seasons in 2008 and 2009. Notre Dame has had ridiculous classes, (on paper) on par with Ohio State and USC, and can only be considered to have underachieved.

What I'd like to see is a measure of how all that incoming talent is developed beyond the obvious "Ws" and "Ls", bowl appearances, etc. A possible indicator of the development of all that talent is where individual players and their squads (offense, defense, special teams) rank in the conference, and nationally, and whether they are moving up in rank, or down. This would be analogous to measuring how many deals going into the sales funnel make it through various deal stages toward a successful close. I won't do that here, since I see my diary is getting pretty long. I'll leave that to someone else. That's probably an imperfect metric, so perhaps "mathlete" or "jamiemac" have some better ideas. If there are any operations research folks in the crowd, they'll almost certainly be able to find a good KPI for the purpose.

Ultimately, though, all of that will eventually have to translate to wins, losses, bowl appearances and national ranking for the team. I think we're at least 2-3 years removed from that point. However, a good measure of the development of talent should provide a leading indicator of whether the program is advancing, or regressing.

I'm curious what others think.