Leading vs. Lagging: Where Should Sales Managers Focus?

Sales leaders will often say they want to see their sales managers focusing on results like revenues, market share, or growth rates. The issue with focusing on these lagging indicators is that sales managers don’t “control” these results. At least not directly.

All managers can really manage are activities, budgets, processes, and other “things.” But salespeople require leadership and coaching to activate their full potential. People cannot be managed; they must be led – this is a truth you can find frequently in leadership literature. Furthermore, the most important decisions we depend on in sales, buying decisions, are made outside of our sales organizations.

Sales managers cannot really “manage sales,” because they can’t directly control buying decisions. Instead, sales managers influence buying decisions by managing the right activities within their sales teams and coaching the related behaviors of their salespeople to improve the quality of each and every prospect or client interaction. And that’s the sales manager’s work that should lead to the desired sales results at the end of the day.

So, asking sales managers to increase sales, without giving them the necessary skills and understanding, is like putting them on the Autobahn without a license to drive. And in case you aren’t familiar with the behaviors on the Autobahn, basic driving skills are not enough. The traffic is too dynamic and too fast. Fluency is required! Sales manager enablement is required!

Focus on leading indicators to achieve lagging indicators

High performing people, regardless of their role, focus on the intersection of what matters and what they can control. For the sales manager, that means managing the right activities and coaching the related behaviors (leading indicators) that lead to the desired results (lagging indicators).

Coaching is a key concept here. In a sales context, coaching is a leadership skill that draws out a salesperson’s full potential by getting them to focus on the right activities and to improve the related behaviors that lead to the desired results, based on structured coaching conversations.

In our 2016 Sales Enablement Optimization Study, we found that a formal or even dynamic coaching process helped more salespeople to achieve their quota (by 10%), and win rates for forecast deals could be improved even more, by 28%.

Let’s be clear: We are not saying there shouldn’t be a focus on sales results. We are saying that the sales manager needs to focus on HOW to achieve the desired results instead of focusing on measuring the results afterward.

As we’ve said before, you can’t manage results. You can only monitor them. By the time you know what your results are, e.g., revenues and orders from last week or last month, they are already history.

For sales managers to ensure that these sales results can be achieved, they must focus on the related leading indicators that tell them if they are on the right track, i.e., managing the right activities and coaching the related behaviors, along the entire customer’s journey. Examples of leading indicators include conversion rates, in the dimensions of volume, value, and velocity. These conversion rates show the progress of leads and opportunities along the customer’s journey and the internal processes.

Conversion rates are important metrics for sales managers because they give immediate feedback, such as whether a new campaign in a specific industry is working or not or whether a particular salesperson is repeatedly stumbling at a specific decision gate in the customer’s journey. And top sales managers can provide immediate coaching early along the customer’s journey to get things back on track while it still matters.

For sales leaders, it’s perfectly OK to measure sales results. It’s just not effective for sales managers to focus on performance in the same way. The sales manager’s mantra is different: Manage the right activities and coaching the related behaviors. Focus on leading indicators early to get to the desired lagging indicators.

Sales manager enablement is an important topic, and we’ve made it the focus of our first major research project of the year – the first CSO Insights Sales Manager Enablement Report.
Get your copy here.

Questions for you:

  • Do you have clarity on the role of your sales managers?
  • Is a specific sales manager role profile guiding the hiring and promotion process?
  • How do you collaborate with HR regarding role definitions?
  • How do you collaborate with sales operations to provide the relevant metrics for sales managers?

 

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5 Comments
  • Mike Kunkle
    Posted at 09:27h, 20 March

    Tamara, great post. This type of thinking was a the impetus behind my ROAM model: Results vs. Objectives, Activities and Methodology. It’s a diagnostic and problem-solving model that uses both lag and lead indicators.

    When managers see a gap between Results and Objectives (lag), they need to look at Activities (lead), especially what the rep is doing and how much. If the rep isn’t doing the right things or enough of them, the manager can address that and often it fixes the problem.

    If the rep is doing the right stuff in the right quantities, or starts to and still doesn’t get better results, the manager needs to look at the Methodology, or quality of the Activities.

    In this way, the manager can use lag indicators and analytics as a starting point to pinpoint where to coach, forming a hypothesis about the problem/solution. Then with discovery and observation, they can dig deeper into lead indicators to validate or pivot the hypothesis and begin to solve the problem. The answer to improving performance usually lies somewhere within ROAM. If it doesn’t, the manager will usually uncover some other organizational block to performance that isn’t the rep, and can address that block (or make someone else in the organization aware of it).

  • Tamara Schenk
    Posted at 05:32h, 21 March

    Thanks a lot, Mike! An excellent approach that helps sales managers to start where they currently are, to take on a learning experience. I guess, the more they work like this, they more they will enjoy using leading indicators to detect challenges (= coaching opportunities) even earlier.

    PS: Congratulations for being the winner!
    You are the first one who commented on one of our posts since we implemented the comment function.

  • Brooke Harper
    Posted at 23:54h, 21 March

    Very insightful post, Tamara. In my opinion, leading and lagging is equally important. Every sales manager’s focus is knowing where his team is going, but knowing how they would go there is also relevant. Both of these should work hand in hand in order to get the result that they wanted. I like Mike’s reference on “Results vs Objectives,” but I prefer “goals and objectives” more. Goal is the vision of the result that you wanted and to reach that goal, you have to set up your objectives. Goals are like wishes, whereas, objectives are the factors in making those wishes come true.

  • Mike Kunkle
    Posted at 13:10h, 22 March

    Thanks Tamera. Keep beating the drum.

    So nice to be the comment prize winner! Will you be emailing my prize or do you need a mailing address?

    😉

  • Tamara Schenk
    Posted at 17:00h, 22 March

    Thanks Brooke, for your feedback! Like your definition of goals versus objectives!
    For sales managers, the question becomes “what is it I can control directly in my role to achieve those objectives?”
    Managing activities, and coaching the related behaviors…

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