rethinking performance manage

Rethinking Performance ManagementA Better Way to Drive Business OutcomesScott Engler, Senior Global Executive Advisor, CEB Middle Market Mark Clauss, Managing Director, CEB Middle Market

CEB Middle Market ReportQ1 2014

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This study may not be reproduced or redistributed without the expressed permission of The Corporate Executive Board Company.

www.executiveboard.com/midsized

Rethinking PeRfoRmance management

© 2014 CEB. All rights reserved. CEB7938313SYN

CEB Middle Market ReportQ1 2014

Table of Contents

State of the Middle Market 3–7

Middle Market Indices 8–10

Middle Market Sentiment 11

Divergence Report 12–13

Finance Report 14

Human Resources Report 15

Information Technology Report 16

Legal Report 17

Marketing Report 18

Operations Report 19

Sales Report 20

About CEBCEB is the leading member-based advisory company. By combining the best practices of thousands of member companies with our advanced research methodologies and human capital analytics, we equip senior leaders and their teams with insight and actionable solutions to transform operations. This distinctive approach, pioneered by CEB, enables executives to harness peer perspectives and tap into breakthrough innovation without costly consulting or reinvention. The CEB member network includes more than 16,000 executives and the majority of top companies globally.

IntroductionEach quarter, CEB surveys hundreds of executives across the corporate suite to define the State of the Middle Market and uncover differences in sentiment between executives at midsized and large enterprise companies. This report details themes and key data findings from this quarter’s survey.

http://www.executiveboard.com/midsized

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Companies are essentially throwing away value. The root of the problem is a simple disconnect between how companies manage performance, how executives communicate and collaborate on the performance management processes, and how dedicated and aligned the strategic plan is to the business goal.

n = 1,163.

Source: CEB analysis.

Degree of Alignment with Corporate GoalsPercentage of Workforce

79% Nonaligned

21% Aligned

Seventy-three percent of midsized companies are forecasting higher revenue over the next 12 months.

Performance Gap Performance Achieved

n = 120 CFOs and heads of Financial Planning and Analysis (FP&A).


Percentage of Full Potential Achieved as a Result of Existing Performance Management MechanismsAverage of All Respondents

Revenue Growth Profit Growth Shareholder Value0%

50%

100%

71%

29%

71%

29%

68%

32%

■ On average, companies fail to achieve about 30% of their potential.

■ Nearly 80% of employee goals are not actively aligned with company goals.

Driving Business Performance Through People Performance

Although midsized companies are focusing on new strategies to drive growth, CEB research found that many of them could hit their growth objectives by simply maximizing their current strategies. What midsized companies don’t realize is that their current performance management systems are inhibiting significant potential for growth.

http://www.executiveboard.com/midsized

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Underperforming companies often have disconnected performance management systems that are detached from corporate goals and essentially drive conflicting behaviors. To overcome this, companies must take an unwieldy mix of targets, activities, people, and resources and create a system focused on the company’s goal. This approach starts with understanding what business performance management is, and how to use it to drive outcomes, and then linking that process to human capital performance management.

A Business Performance Management Process That Drives Outcomes

Our research shows that “performance management” is an umbrella term for a broad set of analytical and management tasks that companies design to help leaders understand and guide firm performance.

Employee Performance Improvement Needed to Achieve Business Goals Across the Next 12 Months

Managers

0%

40

%0

%4

0%

Mean = 22%

CHROs

0%

40

%0

%4

0%

Mean = 25%

Executives

0%

40

%0

%4

0%

Mean = 20%

50% 50% 50%

25% 25% 25%

0% 0% 0%


Business Performance Management Process


CapitalReallocation

OperatingReviews

Strategic Objective

FinancialObjectives

PerformanceTargets

Budgets

Incentives

Forecasts

ManagementReports

Although the majority of the companies surveyed engaged in performance management tasks, the ultimate impact on performance varies substantially. Most often, we found that key process activities succeed only at communicating outcomes, stopping well short of influencing them.

Companies on track to realize the full value of their growth strategies have fundamentally changed their approach to business performance management. They understand that managing performance isn’t just about measuring it along the way; it’s about starting out with a plan that aligns employee behavior with organizational objectives. By connecting human capital to business goals, leading companies not only optimize their existing resources by focusing them on high-value growth tasks but also measure employee impact in a way that helps them determine how to course correct when they fall behind.

Executives, managers, and heads of HR report that they need to achieve 20% to 25% improvements in employee performance to hit 12-month objectives.

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A New, New Normal

Executives in today’s unpredictable business environment are faced with a myriad of changes that have dramatically altered what drives success and failure.

Increasingly matrixed organizational structures, more information, greater collaboration, and more geographical diversity (i.e., coordinating across time zones, cultures, and customer segments) have permanently changed the performance equation. So why have performance management systems stayed the same?

Re-Envisioning Human Performance Management

Our research shows that current measures of performance management are at best inadequate and at worse counterproductive.

In today’s fast changing, highly networked business environment, many HR executives are left questioning the value of their current process and actively looking for ways to more accurately measure and drive performance.

Bus

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A

gai

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Pro

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Go

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Business Unit–Specific Average Employee Performance Score

0 100

No Correlation

100

a No correlation exists between performance review scores and business unit revenue.b Business unit profitability provided by participating organizations.

n = 23,339.

Source: CEB 2012 Corporate Leadership Council High Performance Survey.

Correlation of Business Unit–Specific Employee Performance Score with Business Unit Profitability a,b

CEB analysis showed no correlation between performance management ratings and business unit performance.

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Organizational structures are collapsing into defacto matrices, and 50% of employees report having more people involved in the decision-making process than ever before.

In a business environment that is more fluid, over saturated with information, and constantly disrupted by technology, most organizations are in a state of persistent and dramatic change, often unable to sustain competitive advantages long enough to capitalize on them.

Borrowing a military acronym, our research shows that midsized companies are in a constant “VUCA” environment—volatile, uncertain, complex, and ambiguous—and it’s not going to change. In this VUCA world, leaders have to embrace the new work environment and to do so, they must change their underlying assumptions about leadership. We now have to accomplish our goals through employee networks: collaborating webs of knowledge and projects that are both internal and external to an organization.

It’s Time to Rethink Performance Management

The performance management equation has changed for good, and our current measures of performance are no longer adequate. Only 23% of HR executives today believe their performance management processes accurately reflect employee contributions.

A New, New NormalBy Percentage of Employees Reporting Change

n = 23,339 employees.Source: CEB 2012 High Performance Survey.

Geographically Dispersed

Workforces

More Matrixed Organization

Structures

Greater Amount of

Collaboration Required

Higher Volume of Information

0%

40%

80%

57%50%

67%76%

Our recent survey of 23,000 senior leaders and managers showed that in the past year:

80% have been given more responsibility

76% are being asked to achieve more and broader objectives

65% must deliver business results faster

50% have a more global role

54% have had frequent shifts in job responsibilities

Our Performance Management Process Accurately Reflects Employee ContributionsPercentage of HR Executives

23% Agree

77% Neutral or Disagree

n = 69.Source: CEB 2012 Performance Management Head of Function Survey.

Seventy-eight percent of HR executives tell us network performance has been more important than individual performance over the past three years.

Performance management systems must now adapt to reward networked performance, drive an enhanced set of competencies, and enable collaboration across the enterprise.

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Driving Human Capital and Business Outcomes

The best companies understand and connect the new drivers of performance and adapt to a turbulent, connected, and distributed environment in four main ways:

1. Simplify and focus performance management to a few vital goals. Good performance management begins with focus. Many companies chase far too many outcomes and trust a “cascade” to deliver alignment—the corporate equivalent of the telephone game—leaving workforces unaligned, disengaged, and inefficient. The best companies drive performance by clarifying the key drivers of success and on creating momentum and excitement for achieving a few clear goals through team and network engagement.

2. Link metrics and tracking to behavior and milestones. Many companies set targets that only tangentially align to long-term goals. They set too many goals, fail to track completion of needed tasks, or fail to incent the right behaviors. The best companies put in place tracking mechanisms that pressure-test metrics for alignment against future goals, track task completion and metric success, measure impact, and reward those employees who drive the right outcomes in the right way.

3. Create a connected, transparent performance climate. Most performance management systems fail to measure employees’ real network impact, rewarding and promoting individual performers who may do little to impact the rest of the organization at the expense of true network performers. To achieve high performance, the best companies establish a climate of trust, create incentives for joint MBOs, and reward those who drive organizational value over personal achievement.

4. Enable adoption through narrative reviews, triggers, and focused reporting. Research shows that 95% of midsized company data isn’t useful; however, many companies spend so much time overwhelmed by that data that they inadvertently obscure the ability to sense changes in the environment. Even if they do notice them, they rarely have the decision-making ability needed to adjust and reallocate midstream.The best companies set escalation and divestment triggers; focus their reporting and reviews on changes in the environment, strategic shifts, and adjustments; and regularly report on human capital and operational expenditure resource allocation over future potential to reduce sunk cost and defensive decision making.

Do our goals generate momentum and enthusiasm and allow us to fully resource the few, vital bets that will drive value?

Do our metrics drive the behavior we want?

Does our performance management system reward enterprise contributors over individual contributors?

Do our business reviews help us make the right forward-looking decisions?

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The Quest for Growth with an ROI

Driving growth is by far the top priority for midsized companies this year. In fact, 73% of companies (up 5% from last quarter) expect revenue to increase during the next 12 months. However, that top line expectation is also coupled with bottom line diligence: 68% of middle market companies (a 5% increase from last quarter) also expect cost pressure to increase during that same time.

Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 20130.00

3.00

6.00

3.473.90 3.82

4.15 4.06

CEB Middle Market Near-Term Growth Index

Source: CEB 2013 Middle Market Executive Confidence Index.

Neutral = 3.00

Long-term investment drivers—such as investment in R&D and capital expenditures—improved after slowing down in the second half of 2013, with the CEB Middle Market Long-Term Growth Index up 5% on the year as companies continue to invest in growth.

Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 20130.00

3.00

6.00

3.28 3.32 3.46 3.37 3.43

CEB Middle Market Long-Term Growth Index


Neutral = 3.00

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0% 50% 100%

89%

74%

73%

41%

21%

CEB Short-Term Growth IndicatorsPercentage of Midsized Companies Expecting Increase Over the Next 12 Months

Sales to Existing Customers

Sales to New Customers

Revenue

Marketing Budget per Revenue

Dedicated Advertising Agency Employees


Although the percentage of companies expecting to increase the introduction of new products remains the same at 60%, 12% more companies are now expecting new orders over the next 12 months and 16% more companies are expecting to increase production.

Midsized Companies Expecting Increase Over the Next 12 Months

Introduction of New Products

New Orders

Production

Capacity

Introduction of New Products

New Orders

Production

Capacity


CEB Production IndicatorsPercentage of Midsized Companies Expecting Increase Over the Next 12 Months

0% 50% 100%

60%

76%

76%

40%

Midsized Companies Expecting Increase Over the Next 12 Months

Note: Second value refers to difference from Q3 2013.


60% ( 0%)76% ( 12%)76% ( 16%)40% ( 16%)

Sales to Existing Customers 89% ( 2%)

Sales to New Customers 74% ( 10%)

Revenue 73% ( 5%)Marketing Budget per Revenue 41% ( 8%)

Dedicated Advertising Agency Employees 21% ( 8%)

Maximizing Current Sales Channel and Product Pipeline

The number of companies expecting increased short-term sales increased marginally, while expectations for sales to new customers dropped substantially. Ten percent fewer companies now expect higher sales to existing customers.

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Tapping into Organic and Inorganic Growth

With companies still sitting on high levels of cash, the fourth quarter of 2013 saw a small shift away from M&A and toward R&D.

0%

25%

50% 47%

41%

47%


CEB Long-Term Growth IndicatorsPercentage of Companies Planning to Increase Expenditures Over the Next 12 Months

R&D Expenditures

Number of M&A Deals

Capital Expenditures

Change in CEB Long-Term Growth Indicators

R&D:

M&A:

CapEx:


47% ( 6%)41% ( 4%)

47% ( 0%)

11






Note: Totals may not equal 100% due to rounding.

Lower No Change Higher

0% 50% 100%

5%

61% 35%4%

69% 27%

7% 51% 41%

12% 63% 24%

27% 54% 20%

63% 34%

20% 45% 34%

38% 36% 26%

16% 45% 38%

11% 50% 40%

58% 39%

31% 54% 15%

Energy Costs

Value of United States Dollar

Economic Growth: United States/Europe

Interest Rates

Consumer Confidence

Inflation

Major Nonenergy Commodities

Foreign Competition

Economic Growth: Emerging Economies

Access to Credit

Government Spending

Unemployment

3%

4%

5%

3%

North America 97%

Europe 24%

Asia and Australia 21%

Central and South America 7%

Where Do You Anticipate Growth in Revenue?

Sentiment Indicators

Middle Market Sentiment

Among the macroeconomic factors affecting midsized companies, more executives see higher interest rates, inflation, and economic growth in the United States, Europe, and emerging markets.

Contrary to large enterprise companies, midsized companies are far more focused on revenue growth in North America and much less focused on Central and South America and Asia and Australia.

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Middle Market Divergence Report

Higher

Revenue 7%

Cost Pressure (1%)

Head Count 21%

Revenue Industry 6%

Lower

Revenue (6%)

Cost Pressure (1%)

Head Count (13%)

Revenue Industry (6%)

Where Middle Market Is Different

To fuel growth while improving efficiency, midsized companies are diverging from larger company expectations in terms of revenue pressure, cost pressure, revenue expectation for industry, and notable head count.

Where Middle Market Is Forecasting More Growth Than Large Companies in 2013

In addition to those four areas, midsized companies are expecting significantly higher increases than larger companies in the following areas:

Finance ■ Finance Department Budget ■ G&A

HR ■ Average Health Care Cost per Employee ■ Average Total Compensation per Employee ■ Average Training Spend per Employee ■ Total Hiring Volume ■ HR Budget ■ In-House Training and Education ■ Benefits (Health) ■ Benefits (Other) ■ HR Staff

IT ■ IT Software Expenditure ■ IT-Related Consultant Advisory Spend

Marketing ■ Marketing Budget per Revenue

Difference Between Percentage of Middle Market Companies with Higher Expectations Versus Large Enterprise Companies

Difference Between Percentage of Middle Market Companies with Lower Expectations Versus Large Enterprise Companies

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Real Estate ■ Number of Work Spaces ■ Green Initiatives (LEED)

Sales ■ Sales New Customers ■ Sales Existing Customers ■ Sales Head Count

Operations ■ New Orders ■ Production ■ Labor Costs ■ Capacity

14





0%

25%

50%

0%

25%

50%

21%

36%

22%

45% 47%41%

47%

Midsized company finance departments are focusing on strengthening strategy development, improving business performance management to drive execution, and building processes and capabilities to increase the impact Finance has on business partner decisions.

Middle Market by Function

FINANCEPercent Difference of Companies Expecting Increases Over Decreases in Each Area

To find out more about CEB Finance Leadership Council for Midsized Companies, click here.

■ Strategic risks account for five of the top 10 risks facing midsized companies.

■ Fewer than one in three companies believe their teams consistently derive business insight from data.

■ Only 5% of the data Finance provides is viewed as helpful by the organization.


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The Top Five Areas in Which CEB Is Helping Finance Executives

Developing and Executing Growth Strategy ■ Reorient yourself as a strategic advisor. ■ Create a process that forces choice. ■ Embrace risk as a core element of business performance management. ■ Manage the strategy, not the business.

Improving Business Performance Management ■ Build an integrated business performance management approach to drive outcomes

and action. ■ Select metrics and build dashboards that link to value drivers.

Building Effective Business Partnering and Analytics ■ Focus FP&A activities on providing insight that challenges outdated business

assumptions.

Streamlining Budgeting and Forecasting ■ Increase process efficiency in budgeting and forecasting activities. ■ Focus on improving management reporting, operating reviews, and other business

insight–focused processes.

Driving the Maturity of FP&A ■ Develop a roadmap for the FP&A function that balances process improvement

efficiency and increases analytical acumen to drive growth decisions.

http://www.executiveboard.com/exbd/finance/smb-finance/index.page?

http://www.executiveboard.com/exbd/finance/smb-finance/index.page?

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Today’s fast-paced, unpredictable, and highly networked business environment places a premium on flexibility and collaboration at every level of the organization. Leaders need to adapt quickly to this changing environment and prepare their teams to work as a cohesive unit while also driving individual performance. Unfortunately, many leaders have not evolved with the times, and as a result more than 30% of organizations would replace senior leadership team members if given the opportunity.

HUMAN RESOURCES

To find out more about CEB HR Leadership Council for Midsized Companies, click here.

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Percent Difference of Companies Expecting Increases Over Decreases in Each Area


0%

40%

80%

0%

40%

80%

63%

40%

73%

53% 53%60%

56%

■ Employees reporting to managers who are effective at manager-led development have 25% higher performance levels, are 29% more committed, and are 40% more likely to stay with their organization.

■ Great Global Leaders:

– Are three times more likely to hit three-year performance goals

– Lead teams that have 12% higher levels of discretionary effort

– Have 13% lower risk of attrition than average leaders

■ Business leaders believe that just 35% of organizations are effective at talent management.

■ “Building a culture of innovation” is a priority for 54% of senior R&D executives.

The Top Four Areas in Which CEB Is Helping HR Executives

Measuring and Improving Employee Engagement ■ Provide employees with compelling, non-linear career paths that broaden

development experiences and prepare them for multiple leadership roles.

Improving Manager Capabilities ■ Enable managers to coach their teams in the moment with tactical discussion guides

and reference materials.

Helping Employees Collaborate Effectively ■ Effective peer-to-peer collaboration can raise engagement levels by up to 66%; train

your employees to use and contribute to their network.

Driving Functional Efficiency ■ Benchmark your HR staffing, HRIT, and subfunctional expenses against peers’ to

allocate resources effectively and make the case for targeted investments.

http://www.executiveboard.com/exbd/human-resources/smb-hr/index.page?

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INFORMATION TECHNOLOGYThe ideal skillset of an IT employee is changing fast. Traditional IT roles such as software developer or system administrator are diminishing in importance, and new roles—focused on helping the business easily find and analyze information—are emerging. But most IT functions are unprepared for this shift: only 20% have training in place to develop new-to-world IT skills. Progressive IT functions develop a long-term strategic workforce plan and create training and development opportunities that prepare IT staff for the function’s future.



To find out more about CEB IT Leadership Council for Midsized Companies, click here.

0%

20%

40%

0%

20%

40%

31%33%

31%35% 35%

Discretionary IT–Related

Capex

IT Hardware Expenditure

IT Software Expenditure

IT–Related Consultant Advisory

Spend

IT Maintenance Expenditure

■ Seventy-six percent of employees report a significant increase in time spent working with data and information.

■ Sixty percent report exchanging information with 10 or more people on a day-to-day basis.

■ Sixty-one percent of employees do not believe the support they receive from IT enables them to be fully productive.

■ Only one in five global IT leaders is effective at delivering value to the organization.

The Top Five Areas in Which CEB Is Helping IT Executives

Building a Strategic Workforce Plan ■ Understand changing IT talent needs. ■ Develop a plan to fill critical skills gaps.

Identifying and Developing Next Generation IT Talent ■ Provide learning opportunities that accelerate the development of next generation

IT leaders.

Developing Business Engagement Skills ■ Structure your workforce to prioritize business engagement over technical

proficiency.

Supporting Knowledge Work ■ Equip teams within and beyond the IT organization to collaborate, work globally, and

generate insight from data.

Creating Strategic Roadmaps ■ Align your IT strategic plan with business strategy. ■ Embed review triggers in strategic plans to improve flexibility. ■ Cascade strategic goals across the IT organization.

http://www.executiveboard.com/exbd/information-technology/smb-it/index.page?

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LEGAL

The Top Five Areas in Which CEB Is Helping Legal Executives

Across midsized companies, the general counsel role continues to expand to encompass not only more traditional legal and compliance issues but also more cross-functional priorities such as a culture of integrity, ethical leadership, and enterprise risk management.

To find out more about CEB Legal Leadership Council for Midsized Companies, click here.

■ Seventy-four percent of general counsel want to spend more time executing their legal department’s strategy to support business goals and less time firefighting and responding to business requests for legal advice or questions.

■ More than 70% of legal departments spend one-third or more of their time reviewing and managing contracts. However, despite devoting substantial resources to contract review, more than two-thirds of legal departments are not reviewing the appropriate number of contracts.

■ The average midsized company’s total legal spend is 0.71% of revenue, down by nearly 4% from 2011. Although budgets continue to increase, budget growth rate (for both internal and outside counsel spending) will decline in 2014. Interestingly, legal departments in midsized companies are seeing increased appetite for legal technology investments.

Developing and Improving Your Compliance and Ethics Program ■ Build a coordinated, risk-based program that meets internal and external expectations

for a formal and effective compliance and ethics program.

Building a Culture of Integrity and Ethical Leadership ■ Understand the effect of corporate culture on compliance risk and business

performance, and proactively detect and mitigate risk by creating a values-based culture of integrity.

Identifying, Assessing, and Managing Enterprise-Level Risks ■ Formalize your risk assessment structure and process to assess, prioritize, and

manage key corporate risks according to their likelihood, impact, and velocity.

Tailoring Legal Resourcing and Service Delivery to Business Risks and Needs

■ Understand business partner needs and expectations. ■ Rationalize redundant or wasted effort. ■ Align legal services to business goals and risks.

Accelerating Commercial Contracting Processes ■ Improve consistency and speed by selectively involving Legal where it can most

impact risk and by simplifying agreements and processes for faster deal making.

http://www.executiveboard.com/exbd/legal-risk-compliance/smb-legal/index.page?

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0%

35%

70%

0%

35%

70%

41%

21%

62%

Marketing Budget per Revenue

Dedicated Advertising Agency Employees

Customer Loyalty

MARKETINGWhen it comes to differentiation, the best marketers recognize the limitations of business value and product- and benefit-focused marketing tactics. Not only do customers find business value claims hard to distinguish, but also such claims fail to appeal to customers’ need for personal value. Indeed, personal value has a much greater effect on purchase and willingness to pay a premium than does business value.


■ B2B buyers are even more emotionally connected to suppliers than B2C buyers.

■ B2B brands that establish an emotional connection with buyers based on personal value enjoy three times the purchase intent and eight times the willingness to pay a price premium over the competition.

To find out more about CEB Marketing Leadership Council for Midsized Companies, click here.

The Top Five Areas in Which CEB Is Helping Marketing Executives


Winning the Consensus Deal ■ Create content and messaging that appeals to diverse stakeholders’ common needs

through new approaches to listening, content creation, and sales enablement.

Preparing for the Future of Marketing ■ Take a step back and reevaluate how Marketing creates economic value in the first

place, refocusing on how to make and deliver what consumers want and enabling consumer networks to participate across the entire value chain—from need discovery to offer design to distribution to demand gen to service.

Making Smart Digital Marketing Decisions ■ Seek peer-based, vendor-free insight on adoption plans, benefits, and risks for the

many different technologies out there. ■ Place the right technology bets. ■ Carefully evaluate risk. ■ Prioritize investments, and most importantly, think through how different technologies

will help in achieving critical marketing objectives.

Understanding Customer Buying Behavior ■ Tailor to distinct customer purchase needs and use key channels to build deal

momentum to push customers through the purchase funnel.

Reshaping Customer Buying Criteria ■ Use content to teach customers something new about their own business, help them

set decision criteria, and motivate them to take immediate action.

http://www.executiveboard.com/exbd/marketing-communications/smb-marketing/index.page?

http://www.executiveboard.com/exbd/marketing-communications/smb-marketing/index.page?

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OPERATIONS

■ Only 35% of executives believe their S&OP process is even somewhat effective.

■ Each year, the average company spends 25% of the value of its inventory just to hold it.

■ Only 37% feel that Operations’ KPIs align with overall corporate objectives.

■ Functions that have a higher proficiency with metrics drive performance by 24%.

The Top Five Areas in Which CEB Is Helping Operations Executives

Operations executives are focused on finding and strategically aligning operations to support growth. Leading companies are fine-tuning processes for efficiency, rethinking design, and working closely with Sales to manage inventory and drive expansion.



To find out more about CEB Operations Leadership Council for Midsized Companies, click here.

0%

40%

80%

0%

40%

80%

47% 46%

60%

47%

32%

76% 76% 76%

52%

40%

Optimizing Sales and Operations Planning ■ Communicate the value of a standard, global planning approach. ■ Clearly align stakeholder roles and responsibilities back to measurable planning

activities, and implement a repeatable framework that balances enterprise standardization with local flexibility.

Ensuring Strategic Alignment ■ Evaluate business assumptions, assess customer strategies, and communicate desired

strategic position internally and externally.

Revamping Inventory Management ■ Complement standard processes with decision-support frameworks to manage the

complex trade-offs that help optimize the inventory placement within the supply chain.

Increasing Metric Focus ■ Clearly link Operations’ metrics back to corporate and customer objectives,

evaluate and filter metrics’ key performance drivers, and build living scorecards and dashboards tailored to day-to-day decision making.

Transforming the Procurement Function ■ Create balanced, mature project portfolios that include initiatives to drive cost

structure transformation and product and brand enhancement and are driven by three core functional capabilities: idea quality, execution ability, and selling ability.

http://www.executiveboard.com/exbd/procurement-operations/smb-operations/index.page?

http://www.executiveboard.com/exbd/procurement-operations/smb-operations/index.page?

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0%

45%

90%89%

74%

30%37%

59%

SALES

Sales New Customers

Sales Existing

Customers

Average Sales Cycle

Reliance Discounts Incentives

Sales Head Count

The best organizations focus on building a sales culture that allows for higher performance and retention levels and the ability to attract top talent. Companies have widely adopted the Challenger™ sales model and are now actively working to upgrade their team’s ability to drive customer behavior through insight.



The Top Five Areas in Which CEB Is Helping Sales Executives

■ Customers are delaying contact with suppliers until they complete nearly 60% of their purchase process.

■ Purely rational appeals to customers have limited impact on individuals and decision-making groups.

■ Leading reps are using emotionally oriented appeals to influence buyers to advocate on their behalf at customer organizations and move deals forward.

To find out more about CEB Sales Leadership Council for Midsized Companies, click here.

Influencing the Sophisticated Buyer ■ Enable sales teams to better access and influence today’s B2B decision-making

groups.

Driving Sales Transformation ■ Teach reps to sell to an empowered customer who is capable of learning what to do

on their own.

Getting in Early and Shaping Demand ■ Shape demand by teaching customers where they learn by executing four critical

pre-funnel selling activities.

Building an Insight-Selling Organization ■ Enable your teams to replicate Challenger behavior through different-in-kind

messaging, talent development, and sales process.

Partnering with Marketing to Move Up the Decision Chain ■ Help reps reduce cold-calling time by generating leads using social media.

http://www.executiveboard.com/exbd/sales-service/smb-sales/index.page?

rethinking performance manage

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