This is the first of a two-part series. Read Part II here.
A company’s culture and its sales compensation plan are related by one element: power. Both have the ability to dictate the direction, speed, and effectiveness of an organization. When we work with companies who want to dramatically change their sales compensation plans, we immediately look at their culture.
Consider these questions:
- Is our organization closer to a Cisco or a Georgia Power?
- Can our culture sustain change?
- How difficult will this change be?
- Do we encourage ideas from the front line or are we a top-down driven organization?
- When was the last time we implemented a change in our compensation plan, and how well was it received? (Usually the longer the current comp plan has been in place, the more resistance the current culture will be to any changes in incentive pay.)
There are several factors to take into account when evaluating your culture:
1. Urgent versus laissez-faire. Company culture can affect the level of urgency. For example, sometimes an organization might say they want to step up the level of pressure in the sales organization; the leadership doesn’t feel people are really pushing. At one company people were taking vacations at the end of the year rather than trying to close business. The culture permitted lackadaisical behavior and lacked urgency.
2. Visionary vs. reactionary. Many organizations are trying to move toward a visionary culture; a more solutions-oriented culture versus a transactional culture. Most companies are familiar with the complementary/contradictory relationship of hunters and farmers and the differences in the culture they pose, in terms of how your sales organization is oriented.
3. Team-oriented versus individually-oriented. Some companies prefer people to collaborate, while others prefer each man for himself.
These factors act as a foundation when we begin to look at sales compensation. How a company defines culture offers important hints about the priorities of the business, which are the starting points for any well-designed sales compensation program.
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