“What’s your commit?” asks your sales leader. Often in front of a room full of your peers.
How do you respond? You begin to think...
- "Thankfully, I have a really full pipeline. But I'm not about to commit to 200%. Especially in front of a room full of my peers. I'll undercommit and overdeliver." - (in other words, I'll lie)
- "My pipeline is pretty weak this quarter. But I'm not about to commit 50%. I mean, my boss and her boss are both in the room. I'll just commit my quota." - (in other words, I'll lie)
- "I can't just say my quota. That'll be viewed as just doing the minimum. I'll say 105%." (in other words, I'll lie)
Now that the death-march around the room is over, where every quota-bearing-rep has had an opportunity to lie, an interesting dynamic occurs: Somehow every single rep has just committed to hitting their quarterly quota. Apparently, this will be the first time ever!
The sales leader then adds up the commits. You’re signed up - in front of your peers.
A couple of months later (once the quarter ends), regardless of how the team performed, individual forecast accuracy is atrocious. What happened?
What is the purpose of the commit? In my engagements with leaders who swear by them, the three most common answers I hear have been:
1) "I use it to create my forecast." - Oh, good idea. A forecast built on a foundation of crap. (sorry)
2) "I have to forecast my business to my boss and our board. I want the reps to have an opportunity to do the same in front of their peers." - There's a difference between a 'forecast' and a 'commit'. What you just had the reps do was publicly pledge to something they probably don't believe and certainly can't completely control.
3) "The reps need to be accountable" - They already are...to themselves, their quota, their paycheck, their careers, their team, and if they like who they work for, the organization.
Let's think about it. When a customer says “yes”, guess what? The odds of that deal closing are still not 100%. Likely closer to 75%. Three out of four will close, but one out of four won't. There will be a failure to come to terms. That buyer potentially did not realize the additional steps required to finalize the purchase internally. There are a multitude of reasons why this opportunity could go south.
A customer has said “yes”, and has now gone through a round of contract redlines. The odds are now around 90% of the deal closing. One out of ten deals where everything is buttoned up will still not close. A company will get acquired, a reorganization will happen, a board member will force their hand towards a competitor, or countless other things (that have all happened to me and my teams at some point in my career).
For those who have worked for me over the years, you know that I have never once uttered the word “commit” in a request.
Well first, I've never been asked to give a "commit" to my CEO or my board. I've been asked to give a "forecast". I feel that asking my team to do something I wouldn't do is not being a strong leader.
Second, our wiring as human beings drives an avoidance of short-term pain over the avoidance of long-term pain. We'll lie now to avoid a short term pain (or receive a short-term reward), and will concern ourselves with the long-term consequences later. In other words, the brain is wired to make sh*t up in those environments.
And the biggest reason? Associating the word “commit” creates anxiety which results in lost deal transparency.
What does lost deal transparency mean?
Well first, let's imagine that the deal that has been committed falls apart. Does the rep go right to the manager? Ha! Right. Not a chance.
The rep now spends the next few hours deciding what to do...by themselves. Telling the manager is the last thing they’re about to do - because the phrase, “It sounds like we're getting out-sold” is sure to follow.
Focus #1 for the rep is “How do I save this?” and focus #2 is “How do I present this to my manager to make sure he/she does not assign fault to me?” Now there's a lack of visibility to the leader who may actually be able to help. The story the leader receives may not be quite true. The rep may dig a deeper hole. And due to the story you as a leader receive, you may help dig that deeper hole. All is lost...including your forecast.
Transparency isn’t just something that works when you’re working with prospects and customers. It’s even more magical within the four walls of your organization.
So, instead of “commits”, why not spend the time coaching them, honing the fine art and science of owning their territory "forecast" - like you, their leader?
Forecasting in business should be like forecasting the weather. Nobody is expecting perfection. But, everyone is expecting you to be within a standard deviation of your forecast or so.
In other words, if you’re planning a backyard barbecue in a week, you need to plan. You’ll need to buy the food and drinks, set up the space, and invite your friends. If the 10-day forecast says it’s going to be 70F and sunny, it’s a go. When barbecue day comes and it’s 67 and sunny, all is good. Not a perfect forecast, but close enough to plan and resource.
However, if barbecue day comes and it’s 40F and raining sideways, there’s a big problem. If barbecue day comes and it's 98F and humid, that's equally a big problem.
The goal of sales forecasting is to be in range. Teaching reps that wildly under OR OVER achieving a forecast is not good. Reward forecast accuracy...and coach-coach-coach!
The fruits of having your team's honesty and transparency with regards to their potential performance exponentially outweigh any value from a commit session.
Celebrate the wins...AND THE LOSSES for the effort. Take lessons from every loss to help everyone. If you think you're perfect, get out an carry a bag again. I’ve been doing this sh*t a long time, and I recently screwed up a sales cycle for myself. It happens!
If the news is bad - where the rep is forecasting to be under their target, encourage that transparency! It's an opportunity to help. To support. To coach. When stuff happens, creating a transparent sales environment will have the rep coming to you first and immediately for help instead of a lecture.
And, for goodness sake, have these conversations privately! I still get anxiety just recalling the times I've been involved in a public "commit" death march.
Foster a culture where people aren’t afraid to make mistakes. Foster a culture where there’s accountability coupled with honesty. A good first step is to remove the word "commit" and its associated message from your leadership philosophy.
To subscribe to more of my nonsense, simply pop your email address in below and click "subscribe". It'll ask you to verify your email address.