In today’s blog post, I’ll be looking at how to set sales targets to build a world class sales team.
The power of goal setting
Over five decades of research supports the fact that there is real power in setting targets and goals within your team. At the forefront of that research were Locke and Latham, whose findings shape much of what we know about goal-setting today. They highlighted four key attributes of goal-setting that directly impact outcomes:
- Choice – Goal choice is impacted by a number of factors, including past performance and how achievable the goal is perceived to be, but essentially serves a directive function whereby, once chosen, people are motivated and inspired to move towards that goal.
- Effort – Goals have an energising function, accelerating our efforts towards achieving the goals.
- Persistence – Goals keep us on track, helping us to view obstacles as challenges, rather than blockers.
- Cognition – Goals indirectly affect our thinking and actions, enabling us to consider different options and opportunities that would allow us to achieve the goal – all as a result of our clearer understanding of what needs to be achieved.
How big should you set your goal?
There are many who believe that setting “just out of sight” unrealistic goals motivates the team to strive for higher things and that, even if the team miss, they will still have achieved something.
In my experience, goals that are too challenging and aim to stretch individuals too far, simply result in the team failing. Knowing their goals are impossible to meet, they give up on ever achieving them, often before they’ve even started them.
I believe you should aim to set a goal that is just challenging enough to stretch the team. Creating that little bit of tension between them and their goal, leaves them with just two choices:
- They give up; releasing the tension. A dissatisfactory experience and outcome for all.
- Or they move closer to that goal in order to ease the tension, and in doing so start to see the goal becoming more achievable. At this point the sales leader can increase the tension again slightly, constantly pushing the team to achieve more.
So aim to set challenging goals that stretch the team and review them on a regular basis so you can reset as people start moving towards them.
Input or output goals
Next we need to consider whether we’re setting goals that are either input or output orientated. Sales, by definition, is very output focused – we set goals that are based on the revenue, the margin and the outcomes that we want to achieve. But research conducted by world-renowned US psychologist Dr Carol Dweck, suggests that sales leaders may be approaching this in the wrong way.
Dweck conducted some studies on a selection of children, giving them all a series of maths tests to carry out. One group were then praised on the outcome; their scores/results, whilst the other group were praised on their input, or effort; their concentration and persistence.
Dweck found that the children in the second group, who were praised on input, started to significantly outperform those who were praised on results and output alone.
Her results identified two very clear and distinct mindsets among the children that were directly impacting their results. Those who had been praised on their outputs and who were results driven, began to demonstrate a fixed mindset, where there was a belief that individuals were either good at maths or they weren’t, intelligence for them was static and unchangeable. Over the course of the tests, this group actually started to avoid challenges, gave up more easily when obstacles were put in their way, ignored constructive criticism and feedback and felt threatened by the success of others. As a result, this group plateaued early and achieved way below their full potential.
The second group, who were praised on input, demonstrated a growth mindset. Conversely, they saw intelligence as something that could be developed and actively sought out ways to improve. They embraced challenges, persisted when they came up against obstacles, recognised effort as a necessity, learnt from criticism and feedback and found inspiration (rather than despair) from the success of others. As a result, they reached ever higher levels of achievement.
If we apply this knowledge about mindset to sales, we instantly see the conflict. In sales we, almost without exception, tend to give the wrong kind of praise, focusing on the result or output and moving from one set of results to the next.
Yet if we focused more on praising the input and effort activities and behaviours of our salespeople, we would find our team were able to achieve ever greater results.
The importance of dashboarding
My final key piece of advice here is to ensure you are measuring and dashboarding the results you are looking to get. When you think about your success criteria, split it into two components:
- The individual and group competency measures that you’re looking for and would like to measure.
- The business impact measures.
For me, it is crucial to make sure you’ve got a simple dashboard in front of the team that they can access on a daily basis, that demonstrates them moving towards that goal. You’ll find that this goal visibility starts to positively impact individuals’ behaviour and their ability to go on and achieve the targets that you’ve set.
If you’d like to have a chat further about this topic then please contact me on firstname.lastname@example.org
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