aligning diverse sales mgmt culture through a common sc philosophy (final to slide share)
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September 10, 2013 panel presentation at WorldatWork's Spotlight on Sales Compensation conferenceTRANSCRIPT
Aligning Diverse Sales Management Cultures through a Common Sales Compensation PhilosophyJerome A. (“Jerry”) Colletti, Managing Partner, Colletti-Fiss, LLCKatie Donohue, Sr. Director, Global Compensation & Sales Compensation
Strategy, Medtronic, Inc.Kerry Heiss, Director, Sales Operations, StandardAeroLisa Soderquist, VP, Human Resources, Allergan, Inc.
September 10, 2013
Welcome to Our Panel Presentation and Discussion:Session Format
Session objectives
Introductions – panel members
Context for our topic; why important and best practices
Discussion topics and initial questions
Your interests and perspectives
Wrap-up
Session Objectives Identify some of the common
problems associated with not having a global sales compensation philosophy
Share best practices – how to conceptually think about it; experiences of our panel members in executing to it
Address/discuss your questions; hear about your experiences
Sales leaders often have different views about how to pay sales people who are doing the same job…
…which can lead to defensive behavior and contributes to ineffectiveness and inefficiency.
Our Panel of Practitioners
Katie Donohue The largest global medical device company; founded in 1949 Annual revenue of $16.6 Billion; 45% outside the US Comprised of 45,000 employees doing business in 120 countries in the
CRDM, Coronary, Endovascular, Structural Heart, Diabetes, Spine, Neuromodulation and Surgical Technologies sectors
Role/involvement with sales
compensation
Led the sales compensation integration design for Cardiac and Vascular Group with 7 different work streams and over 80 different plans
Designed and implemented the Global Sales compensation strategy and on-going consulting with Strategic Business Unit leaders on innovative plan design, metrics, administration and competitiveness
Business owner of new Sales Commission System implementation
Professional Credentials
Researcher on "Perquisites: Are They a Business Necessity?" by Julie and "The Flattening of the Organization" by Julie Wulf, University of Pennsylvania.
• Published "The Impact of Performance Management on Organization Success," Harvard Business Review, Sept.-Oct. 1996 with Abbie Smith University of Chicago
Previously at Aon Hewitt for 17 years consulting on benefits, sales compensation, broad based compensation, M&A, and executive compensation
Kerry Heiss A $1.6B aviation services company focused primarily on the
Maintenance, Repair, and Overhaul market. Comprised of 3,700 employees working in six business sectors.
Major business units are focused on Airline, Business Aviation, Helicopter, Industrial Power, Component Repair, Military, and VIP Aircraft Completion markets.
SA traces its roots back to 1911.
Role/involvement with sales
compensation
Led several iterations of incentive compensation plan design. Engaged with business leaders to develop comp plan philosophy. Oversee administration of all sales incentive comp plans. Ongoing project work to better align sales compensation with
desired behaviors, and to ensure comp is appropriately competitive.
Professional Credentials
5 years of experience in Sales Operations, 8 years with StandardAero. Current role focused on sales methodology, sales compensation, and sales force effectiveness.
Certified Miller Heiman Sales Methodology Client Associate (deliver and coach methodology).
Previously spent 4 years with GE Healthcare and GE Aviation. Certified as a Six Sigma Black Belt.
6 years service as an officer in the U.S. Navy, focused on logistics.
Lisa Soderquist
A multi-specialty health care company established 60+ years Commitment: uncover the best of science; develop, deliver innovative
treatments to help people reach their life’s potential Approximately 11,000 highly dedicated and talented employees Presence 100+ countries with a rich portfolio of pharmaceuticals,
biologics, medical devices and over-the-counter consumer products In 2012, total product net sales reached $5.7 Billion
Role/involvement with sales compensation
Led global framework project Liaison among regions for roll out Advisor link for North America’s Commercial businesses -- Corporate
Compensation and Commercial Sales OpsProfessional Credentials Extensive experience in large and specialty pharma, semi-conductor, hi-
tech and hospitality organizations in global and U.S. markets Concentration in talent acquisition, succession planning, employee
engagement, compensation 2013 Susan G. Komen Grant Committee 2013 Active Member, National Association of Professional Woman Resided and worked in Canada, Europe, Singapore, and the United States
Why Important and Best Practices
… building collaboration across businesses and global regions…
Framing Our Session Discussion
How diverse sales management cultures impact sales compensation planning and pay practices
Characteristics of a common sales compensation philosophy
Challenges/common problems addressed when there is alignment between sales leadership and sales compensation philosophy
Diverse Sales Management Cultures:One Global Company’s Experience
“…there is no consistent process for how to design plans; some BUs do not appear to have a defined process…”
“…performance measures are all over the board and approval authorities are inconsistent – few plans are actually approved by the BU President…”
“…there’s no consistent format to our plans…no look, feel or “brand” associated with our company…no consistent approach to communication…”
“…wide variance in salary/incentive ratios for same jobs doing the same work across global regions…some variance not explained by country labor market practices…”
“…significant inconsistency in rules pertaining to employee relations terms and conditions……no consistent governance”
“…no company-wide tool set or reports available to assess effectiveness..”
What is a Sales Compensation Philosophy?
SalesCompensationPhilosophy
…a company’s commitment to link sales employee compensation to competitive labor market levels/practices and business goal achievement
Guiding Principles
…a set of prescriptions that define how the compensation plan is designed and managed consistent with the company’s philosophy
PlanObjectives
…two or three key objectives that a particular plan supports for a fiscal year
Strategic, long term perspective Tactical, annual perspective
Four Elements of a Complete Sales Compensation Philosophy
Element Thumb Nail Description
Labor market position Market percentile Peer or comparator companies
Performance orientation
Expected performance for pay Basis for salary; salary/incentive ratio Performance measures and goals Overachievement opportunity
Administration
Clear governance rules, including approval authority
Commitment to fair and equitable administration
Articulated appeal and review process
Communication Clarity of plan description Focus on self-calculating tools
Guiding Principles That Follow From a Sales Compensation Philosophy
Four Elements of Philosophy
Typical Factors Worthy of Guiding Principles
Labor market position
Number and quality of survey sources Job charters and accountabilities Job scope and required talent profile TCC market percentile position based on business
phase Compensation mix determination; role of salary
Performance orientation
Target incentive pay related to performance Number and types of measures Performance range; standards/quota Performance distribution OA (overachievement) guidelines
Administration Approvals; governance; implementation process
Communication Timing and roles involved
Some Benefits Addresses ineffective and inefficient practices relative to
how sales people are paid
Creates opportunity to share internal best practices
Increases the organization’s ability to bring on line an automated sales compensation system
Improves ability to assess sales compensation ROI
Increases senior management confidence that sales forces are being paid to drive the right behavior and performance
Mitigates against potential legal liabilities
Panel Discussion
Discussion Questions for Our PanelFour Initial Areas of Focus Sales compensation philosophy: formal vs. informal –
pro’s and con’s
Flexibility allowed to BUs or global regions’ local management – areas of uniformity vs. tailoring to local markets
Common problems associated with sales compensation and how philosophy/guiding principles make a difference
Advice on do’s and don’ts
Summing Up
…Key Learnings…