Change Management

By Malcolm Fleschner

You know what happens when word leaks out to the sales force that management is considering a change to the compensation or incentive plans, right? Rumors begin flying, tongues start wagging and before you know it you’ve got a near insurrection on your hands. Martin Hood, Senior VP, Channel Sales and Merchant Partnerships with American Express Incentive Services (AEIS), compares sales managers considering altering an incentive program to prospective real estate buyers. But instead of focusing on location, location, location, he says, the key for sales managers is communication, communication, communication.

An organization needs to make it very clear up front – before rumors starts to leak to the sales team – that the sales incentive program is going to be changing, he says. “The sales team needs to hear a comprehensive overview or directive from the most senior person in the sales channel, and that needs to be the first time they hear that the sales program or the sales incentives are going to change.”

Hood recognizes that salespeople likely will react to the proposed changes with skepticism. But, he adds, by getting in front of the issue managers can frame the benefits of the changes, not only to the organization but also to the salespeople themselves.

“Salespeople will not respond by saying: How does this affect me? They’ll say: How does this negatively affect me? It’s human nature to assume the worst in such situations,” he says, “and a lot of companies feed this attitude by opening with all the wonders the changes are going to do for the company. While I think it’s important to hang the corporate strategy and the corporate philosophy out there so that everyone understands how the changes reflect a direct line of sight from the salespeople all the way through the organization, it’s more important to show the salespeople precisely how they will be affected and potentially benefit.”

To accomplish this goal, Hood says AEIS always makes a point of helping salespeople they work with understand the what’s-in-it-for-me of a new incentive program.

“When we help a company change their incentive program we put together a white paper that shows individual salespeople what the new plan is, what the new plan would have meant for them last year based on their performance and what it will mean under this year’s plan based on the goals that were set for them,” he says. “They can begin to draw a correlation as to whether there’s an upside or downside in what we’re asking them to do on a daily basis.”

“But success with this communication plan,” he adds, “is all contingent on management making sure that they’re the ones to let the salespeople know about the change first and aren’t simply responding to speculation that’s already out of control.”

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