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Thermostat Leadership

One of the greatest innovations in travel comfort is the dual climate control system.  In addition to providing the ability for each passenger to enjoy their ride at a temperature most favorable to each individual, I have no doubt it has helped personal relationships between passengers with different internal thermostats around the world.

No longer do my wife and I battle on the climate of the car...we just set it where it "needs" to be for each of our sides and it just stays there.  The difference may only be 1-2 degrees, but the consistency is a difference maker that has impact in many aspects of how we enjoy the ride.

I've been fortunate to have great mentors in my life.  Early in my career one of my mentors, Gary Rhoads, provided me feedback that fueled much of the success I would have as a sales leader.  He taught me a simple principle:  Great leaders act...they don't react.

Great leaders act...they don't react.

One of my favorite lessons in leadership comes by examining 2 simple devices.  The first is the thermometer.

thermometer-1176352_640 The thermometer is a really simple device that does one thing:  react to external factors.  As the temperature in an area rises, the thermometer rises.  As the temperature in the same area cools off, the thermometer falls.  A thermometer doesn't do much else.  The reading just rises and falls as the environment around the device changes.

Compare the thermometer to the thermostat.  While the thermostat reacts to the temperature, the thermostat regulates the environment.  It doesn't matter if it is raining, if there is a blizzard, or a record heat wave...the thermostat carries on in a predictable way.

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If things get a little too hot, the thermostat works to cool it down.  If it gets too cool, then the thermostat heats things up until the optimal temperature is achieved.  A thermostat never lets the temperature get too hot or too cold.  As a result, the thermostat is left making minor "tweaks" on a consistent basis rather than having major "heat up" or "cool down" projects.

Which kind of leader are you?  A thermostat leader gets hot when the pressure is on.  Is the intensity and effort at the end of a month, quarter, or year different than it is at the beginning or middle?  Do you cool off when the pressure is off only to heat back up again when the quarter-end comes?  Do you have a different temperature for each month of the quarter?

Thermostat leaders have a completely different approach.  They help their salespeople identify the cadence of success and help them stay there.  Metrics are used on a daily & weekly basis to ensure that only moderate adjustments are made.  The hallmarks of thermostat leaders are coaching and consistency.  Coaching isn't reserved only for the under-performers, coaching is a centerpiece of the thermostat leadership approach.  These leaders take an active role in helping maintain a cadence of success.

I have found there are 3 tactics to help you achieve a cadence of thermostat leadership:

1.  Understand the Process Required to Succeed.  I participated in a focus group a couple of weeks ago with Sales Enablement and Sales Ops leaders.  The word "process" came up and several of these leaders said the word "process" had a negative stigma.  This tells me they were part of environments that didn't understand coaching.  Without process, there can be nothing to coach to.  Without process there can be no sustainability or predictability.  Without process, you are destined for the roller-coaster ride of thermometer leadership.  There are 3 process points that are relevant to any B2B sales team:

  • New opportunity starts in Dollars:  This simple truth applies to all salespeople:  You can't win an opportunity unless you start it first.  Opportunity starts in terms of dollars is a key metric.  There must be a process around the origination of new opportunities.  In each organization there will be several skills and several activity types that fuel new opportunity starts.  It is important to be aware of these and coach to specific new opportunity start metrics.  The formula for new opportunities is simple:  (New Opportunities in $) x (Win Rate) = Goal.  Since goal and win rate are fixed numbers, you can simplify this formula as follows:  New Opportunities in $ = Goal / Win Rate.  Every week and every month a primary goal must be to start enough to hit goal.  This is a simple coaching point that very often is never discussed.
  • New opportunity starts in Number of Deals:  Once you understand how many dollars need to be originated in order to hit goal, it is important to translate this to a number of deals.  This is also a simple formula:  Opportunities in # = (Opportunities in $) / (Average Deal Size.)  This helps you understand how many "average" deals it will take to hit goal.  A common mistake salespeople make is to start elephant hunting.  A great thermostat sales coach will look to help create a cadence of winning without requiring "uncommon" deals in order to win.  While the showcase deals are fun to win, having everything riding on them creates unnecessary pressure and very often a willingness to accept unfavorable pricing or terms.  Understanding the required # of deals to start helps a salesperson have protection against pushed deals.  With the right amount of deal flow, a salesperson will be able to achieve goal with an average sized deal and an average win rate....something that removes much of the stress leading to poor negotiating strength.
  • Velocity or speed of sales cycle:  Every product in every organization will have a natural cadence.  It is important to understand the "Sweet Spot" of how long a sales cycle should take as well as how long each stage of the sales process should take.  In my experience the best predictor of wins and losses is the length of time something is in the sales process.  For example, one organization I worked with won 92% of the deals they won in 90 days or less.  You can learn a lot about the skills (and skill gaps) in a rep when you compare their cadences to the optimal cadence for the company or product.  Speed is a huge consideration and a key driver of the sales process.  Don't be quick to chalk slow deals to "a unique situation." While these situations certainly exist, smart coaches help their reps learn how to create urgency that results in a natural sales cadence.  I have learned that generally speaking, this is a fact:  Time Kills Deals.

Coaching to process (instead of outcomes) really is as simple as 1) making sure enough new opportunities are being originated and 2) optimizing the cycle time.

2.  Create a Cadence of Coaching.  Studies show that leaders spend less than 10% of their time coaching reps.  Studies from the CEB show that coaching drives retention and performance.  It is the only investment an organization can make in their sales team that will yield an infinite return.  Other investments yield linear returns (i.e. adoption rates of technologies).  For coaching to create the advantage and returns it is capable of, coaching needs to be a primary role of a sales leader...not something they do when there is a big problem or if they have time.  Thermostat leaders build trust with their reps when the salesperson believes that the leader is authentic in their desire to help them improve.  To do this, coaching must happen regularly...when they are killing it as well as when they are behind goal.  Talk is cheap.  Commit to the role of coaching and create a cadence that ensures every rep gets coaching on a regular basis.  You will be amazed what it does to the rep/leader relationship and how many opportunities there are for improvement once a salesperson believes they have a leader taking an active role in their success.

3.  Paint the Target.  One of the tactics I have learned makes the biggest impact to coaching success is called "Paint the Target."  When we paint the target we don't just put a goal in front of a rep and encourage/motivate/threaten them to hit it.  Great leaders show reps how to hit the target.  There are 2 tactics that have helped me do this with success in a number of organizations:

  • "What If?"  A key component of any coaching session is to identify skills that the rep wants to improve.  Elements like # of deals in the pipeline, average deal size, win rates, and length of sales cycle can very quickly be matched to skills that support your unique sales process.  Thermostat leaders learn are very good at helping their reps understand the impact of improving a skill.  Just like a salesperson needs to help their client understand the impact of solving a problem or achieving a result, sales leaders need to help their team members understand the impact of improving their sales skill set.  I warn salespeople that it isn't the customer's job to figure out why a salesperson's solution matters.  My warning to sales leaders is similar:  If you don't help your salespeople see why improvement matters, they either won't improve or they will find a leader who will.
  • Show/Share/See.  Before he or she can expect a rep to demonstrate a capability, a good leader must demonstrate this skill themselves.  Great leaders have the ability to show the salesperson how to do the sales activity or skill required for success.  This is one of the biggest reasons experience is so important in order to lead.  It is rare to find a successful sales leader that hasn't first learned how to hit a number.  Great sales leaders don't have to be the top salesperson, but they do have to be a competent salesperson.  I still use skills today that were taught me by my first great sales mentor, John Hyde.  Don't tell them to make more or better calls, show them how.  Don't tell them to dollarize a solution, show them how to do it.  Whatever the skill in your sales process, if you can't or aren't willing to demonstrate HOW to do something, you have no right to push the more button.  Seeing a skill used successfully will help a rep grow faster than any role-playing ever will.  Once a sales leader has shown how to do the skill, the next step is to share the responsibility of executing a skill.  A leader does one part and the rep does another.  They work as a team and the leader provides support in the sales activity.  Once the sales leader has successfully helped in the share stage, they sales leader can expect to see this behavior become part of the way a salesperson does business.  Show, then Share, then See.  It is a simple but powerful approach and it is fantastic for building strong working relationships between salesperson and sales leader.

Which Are YOU?

The thermostat leadership approach doesn't mean there won't be periods of high pressure and lower pressure.  It just means the leader and his or her sales team won't push the panic button when those times come.  Active leaders provide consistent results.  Thermostat leadership is not micromanagement.  It is simply choosing to regulate the environment of sales rather than reacting when the chips are down.

This is an important enough topic that every leader needs to stop and take an honest assessment of what their style is.  Are you reacting or acting?  Build a coaching program and you will find your ability to be a thermostat leader is closer than you think.  More important, the benefits of this approach are larger than you may imagine.  Those that react will get the attention of their teams, but those that act will get something much more...the trust, the heart, and the willingness to change from their teams.

Stop reacting and start leading with coaching.  Do it and your thermostat will help everyone enjoy the ride.

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