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Setting operational sales goals

Setting operational sales goals right throughout the sales organization is essential for the Chief Sales Officer’s success. If done right these goals will act as instant alarm signal if the sales ecosystem runs into a constraint.

Sales unit types and operational sales goals

Each type of sales generating units must have operational sales goals assigned:

Company internal units

Sales generating units

These units carry the prime responsibility for achieving their part of your operational sales goal.

Many companies organize their sales in matrix form, for instance by Regions and product lines.

Clear accountability for goals eliminates conflict between the two lines of accountability:

• Position hierarchy units as prime accountable for the operational goal. (Their total goal must be your top level sales goal) and
• Position matrix units as subunits of hierarchy units.
  

Cross-functional units

Such units (examples: HR, IT, Controlling) do not carry operational sales goals.

For the Chief Sales Officer’s goal their role is to contribute in sales generating units’ operational plans.

Units outside of the company business system

You may also set goals for elements outside of the company business system. 

Examples

• Customers (you want to track achievement of operational sales goals by geography, key accounts, channels) or even
• Customers’ customers (achievement of operational sales goals by end user segment, for example)

Six recommendations for setting the right operational sales goal

1. Ensure clear accountability in matrix organizations

Lack of clear accountability in matrix organizations will result in conflict of authority. Double accountability does not exist and not recognizing the issue ("we do not have a matrix organization here") does not resolve the issue.

For matrix units establish undisputed accountability in agreement with your C-level management team. 

• Prime accountability must be assigned to the hierarchical units. Their goals must add up to your total sales goal for the company.
  
• Matrix units must be positioned as sub-units of hierarchy units.

For example: "Sales managers of Regions are accountable for sales goals. Product sales managers are accountable for achieving product sales goals within Regions".

2. Assign operational sales goals to each sales generating unit

If some of your sales units do not have a sales goal assigned you are a pilot in blind flight: you are unable to recognize or foresee constraints for your own total company sales goal.

With each sales unit agree to its sales goal and document the agreement in the unit sales goal chart.

3. Assign sales goals to single accountable owner

"When a team is accountable for achieving a goal, nobody is" (Bill Dettmer).

Assign sales goals to single accountable owners without exception.

4. Set sales goals for breakthrough

Comfort sales goals make you blind for constraints.

Set your sales goals to aim at breakthrough performance to lead the company to face it's true constraints and thus ensure its survival.

Adjust your payment procedure (salaries, commission, bonus) to such challenging goals.

5. Do not inflate sales goals

Some sales managers believe in inflating goals: to set higher goals to their subordinates than they have themselves. This practice means that they resign from their accountability for resolving constraints.

This is NOT what you want as Chief Sales Officer. Don't allow it, ever.

6. Keep incentive goals separate from operational sales goals

In addition to operational goals companies often set other goals like "challenge goals", "incentive goals", "rain maker day goals". These are NOT just another type of operational sales goals - they are incentive goals and should be viewed and treated separately. Setting both types of goals is like "aiming at two rabbits at the same time".

Keep operational sales goals strictly separate from other goals. Especially, do not show other goals on you sales goal charts.

More information

More about setting the right operational goals in book SURF THE WAVES OF OPPORTUNITY, Chapter 4 "Right goals". (Website, Look inside)