It's not a question if managers want to boost their sales teams' productivity. Of course they do - after all, sales productivity directly influences the bottom line of companies. And billions of dollars are spent on tackling trying to boost sales performance and productivity But no one has the 'right' answer yet, and there seems to be no silver bullet solution to this age old problem. What works for one company might not work for another. What worked one year might not work next year. The field is complex and ambiguous but that should not discourage one from trying out better systems to find the one which sticks.
The Harvard Business Review recently carried an excellent article - a guide to measuring productivity. By recently, I mean 3 decades ago. But as you read through the article, some things become crystal clear - the problems outlined then are still the ones you (and countless others) face today, 3 decades later.
Perhaps the most important use of productivity measurement is as an objective source of information about long-term operating trends.
W. Bruce Chew, No-Nonsense Guide to Measuring Productivity, Harvard Business Review, January 1988
Thankfully, 3 decades later, companies have woken up to the need for measuring productivity in a more accurate and systematic way. With the advent of "big-data" and it's ilk, companies and managers have all the data they can collect about their internal performance. And they make good use of that data by analyzing trends in a few metrics they deem important.
But it's also true that the management often overcomplicates things. They do this by devising rules which become hard for the employees to understand. These rules are then directly or indirectly linked to the final appraisal of the employees.
So, what's the solution?
Towards Better Measures
First things first - relying on just one or two metrics to measure a team's productivity is not enough. While measuring productivity, it's recommended that you use multiple metrics with weightages assigned to each of them. We'll call this a 'multi-factor' approach.
So, from here on, we'll use the term Scorecard to define this multi-factor productivity index of an employee which will depend on their performance across several metrics.
Secondly, it's imperative that the Scorecard you use to measure your employees be easy to understand. It should be so easy that your employees can explain the rules to other employees. There shouldn't be a lot of math involved, certainly not differentials and exponentials! The correlation between good work and higher scores should be straightforward for everyone to explain.
A multifactor index to track productivity gives managers a convenient scorecard to answer the question, “How are we doing?” But an index can play this role only if managers and workers understand it.
...when the primary goal is to influence behavior, the simpler the better must be the rule If the people who use an index can’t understand it at a gut level, it probably will not affect their decisions and priorities. W. Bruce Chew, No-Nonsense Guide to Measuring Productivity, Harvard Business Review, January 1988
Thirdly, the system you adopt should be flexible. It's quite possible that your initial assumptions regarding productivity were not correct. Or maybe the market changed, and your team has slightly different priorities now. Investing in a heavy, analytically perfect system may give you very accurate results, but the cost of maintaining and keeping it updated is non-trivial.
Scorecards in Catalyst
With these three critical cornerstones in mind, we developed the Scorecards in Catalyst, which are:
Multi-factor: The scorecard is always composed of multiple metrics, each contributing a certain percentage to the users' final score. The scorecard has two sections - the Activity points which denote the efforts, i.e., the input, and the Objective points which denote the results, i.e., the output. We've made the scorecard flexible enough that you can different scorecards for each team, function or location in your organization, but also intuitive enough that the scoring across your whole organization would be standard - meaning that a higher score will directly correlate to a better performance
Easy to understand: Users always know how they got each point on their scorecard, and what they need to do to get more.
Easy to change: If you see that the final productivity is dipping even when your users are hitting all their goals, you can change the scorecard or the weightages in a jiffy. You can add more metrics to either the input or output side of the scorecard. Since you can assign different scorecard to different teams, the output metrics of one team (using Scorecard A) can be the input metrics of another team (using Scorecard B).
Scorecards have three concepts which need to be considered while creating the scorecard:
- the time period of the scorecard,
- the benchmark
- and the weightage.
While designing the scorecard, managers would define the metrics which would make up the scorecard. Along with the metrics, they'd also define the benchmarks for each metric that they want each person to achieve in the scorecard's time period. If employees achieve those targets, they'll get weightage amount of points. If they underperform, they'll get lesser points, but if they over-perform, they'll get more than the weightage points too! This means that the Activity and Objective points can go over 100. This encourages a level of competitiveness to be maintained even among high performers who exceed the expectations!
The end result
Scorecards are a good measure for the agents to self-assess their and their peers' productivity, but what do you get as a manager? Glad you asked. Here are some of the insights we offer for the managers - all of this data is based off the productivity ratings measured via scorecards:
Scorecards can be used to get deeper insights into recent trends among teams and individuals - such as who performed the best in the past 3 months.
You can also get a broad overview across your teams or scorecards using the correlation insights, where all users are plotted on scatter graph where the input and output are the two axes. Anyone in the green sector of the graph is very productive, and the people in red might need your help in pushing up their productivity.
So, that's all for Scorecards today. We'll pick up another technical topic to explore next week. To get started with Scorecards, sign up for our 14-day free trial today!