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Battling The Burnout Culture: How to Game The Plan

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There's a very good chance you, as a business leader, are stepping on your own feet without knowing it.

It's no secret that new business and customer retention are critical for hitting your numbers. But all too often, entrepreneurs' focus on hyper-growth quickly creates burnout that actually hurts their bottom lines.

Seriously, are you helping or hurting your most valuable asset: the people on your team?

Of course, combating burnout is one of Arianna Huffington's key motivators in creating the Huffington Post's Third Metric platform. It is also a key premise of Game the Plan: Every Sales Rep's Dream; Every CFO's Nightmare. (My good friend and former business partner, Michael Greeves, recently recommended it to me. The author, Christopher W. Cabrera, is the Founder & CEO of Mike's current employer, Xactly Corporation.)

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All that being said, you need to listen up. We're currently living in a motivation famine, and it's costing businesses an average of $550 billion per year. (Source: Gallup) But there are solutions to re-fueling our teams -- and our bottom lines. Get ready to take notes as I share what I learned.

Put the professional aside for a sec, and focus on the people.

No one is denying that revenue has to be there for business to stay viable. But all too often, executives forget -- or at least act as if they forget -- that professionals are people first. Do you know the answers to these questions about your team?

  • What matters most to them, and why?
  • Why do they come to work?
  • What do they do on the weekends?

Your team intuitively knows if you know the answers to these questions, and it dramatically influences how they act. For example, a sales rep who's aware you know he wants to propose to his girlfriend is that much more likely to make President's Club. Conversely, someone who doesn't think you know her name might game her compensation plan, and focus only on upselling at the expense of getting any new business.

Unleash ridiculous results with intelligent incentives

The key here, of course, is having a way to quantify this insight about your workforce, particularly at companies that have large and global teams. Believe it or not, there's technology for this, but since this isn't a tech tool pitch, let's talk about the principles that go into the product.

You can figure out how well you quantitatively and qualitatively know how to motivate your team by looking at your numbers. You data should help you answer these questions:

  • How well do I understand why my star performers succeed over my middle performers?
  • Could I better understand why some bonuses are so much more effective than others?
  • Do you I really know why one territory always does so much better than another?
  • Why do some products seem to sell so much better than others?

A relentless focus on revenue is important, but can only be sustained and obtained if you understand and apply what will motivate your workforce to get there, over and over. So, gather that data, then use it to decide.

Measure, just not too much

All too often, compensation plans tell teams what to do, without telling them how to do it. This is the role of metrics. You wouldn't want to get a new customer at the expense of losing five current ones, right?

Jack Welch, former CEO of GE, coined the term stretch goals to emphasize the practice of tempting your employees to do the impossible by setting lofty goals. This practice can be effective, provided you're not trying to achieve too many goals at once.

According several terabytes of data, and Xactly's decade of being in business, most companies make the mistake of tracking too many performance metrics. That overwhelms people. The best results come from plans that track no more than three to five key performance indicators. The best track only three. This is the case, regardless of industry, job function, or level of seniority.

Other noteworthy secrets include ensuring at least 65% of reps are making quota, and that your turnover doesn't exceed 20%.

Compare to out-compete

I keep mentioning data, the well-known darling of business at the moment. But here's what you don't know: In the past, executives developing compensation plans have just had access to academic and anecdotal empirical data. Only recently has empirical, cross-industry data become available. With it, you can compare your company's historical performance and future goals with industry leaders, and make decisions that have already been scientifically shown to have traction, such as:
  • How many people are typically paid at the close of each deal
  • How many SPIFs a comparable organization launched within a given quarter
  • When and how other organizations pay their reps for each deal

There's a reason we test, test, test and re-test products before releasing them. Why would you do anything different with your compensation plans, when they so clearly can create highly motivated teams or those weighed down by burnout? Know how you stack up against your peers with industry benchmarks, and you'll overshoot the mark.

Take it beyond your sales force

One thing to keep in mind is that incentive compensation plans aren't just for sales reps any more. Data helps you combat burnout by making decisions that boost productivity and profits across every job function in each department, and harness the unique motivations of each employee.

Produce powerful profits, without the burnout

The ultimate irony, of course, is that when we shift our focus away from revenue, we inspire our teams to new levels of performance. In other words, when you put your workhorses (your people) out front, your company's cart will move. One company that Xactly works with saved upwards of seven figures when they dove into their data.

In short, entrepreneurs and business executives can powerfully align incentives for individuals, teams, and departments, and position their organizations to collaborate and win, in a way that benefits everyone. Build your company brick by brick with tools and strategies that deliver accuracy, real-time feedback, and lava-hot motivation, and you'll be in the money -- pun intended.

This blogger graduated from Goldman Sachs' 10,000 Small Businesses program. Goldman Sachs is a partner of the What Is Working: Small Businesses section.