Better forecasting accuracy is achievable – Here’s how
This article was originally published in Sales & Marketing Management.
The ability to accurately forecast results and behaviors has always been fundamental to business success. If a company can predict future outcomes, it will be able to leverage its skills and opportunities to increase revenue and make progress against its goals.
Greater predictability leads to more effective budgeting and planning so that leaders and teams can make decisions with greater confidence. For instance, if a company can accurately forecast the response of different demographics to its ongoing sales campaign, it can dynamically allocate resources to capitalize on these insights. This adaptive approach allows the business to optimize the performance of current campaigns and fine-tune the services offered, potentially opening pathways to introduce other products.
From a weekly to a quarterly to an annual scale, from market trends to supply chain visibility, predictions can help teams plan for success. This is always the case in business, but it is even more important today, as greater agility is needed due to changing circumstances.
What stands in the way of accurate sales forecasting?
Improving the accuracy of sales forecasts and building predictable revenue are top-of-mind challenges for chief revenue officers, and this pressure filters through the organization. So, what stands in the way? Why can’t teams find the predictability they need?Often, the problem comes from inaccurate assessments of deals. Sellers often do not correctly assess the size and the timing of the deals they have entered into their CRMs. They may not have adequately understood their clients’ needs or budgets.Another problem is misunderstanding signing authority. Often, a seller will misjudge the level of authority they need to close a deal. They’ve been talking to a mid-level leader who seems eager, not realizing that they will need stakeholder alignment and signoff from a senior executive in order to close. They may also need to get multiple peer executives to sign off on the purchase if the budget is not clearly owned by one buyer.A third issue that stands in the way of accurate forecasting is “super seller syndrome.”
How super seller syndrome hinders predictability
Super seller syndrome happens when sales leaders are promoted into their new roles not because they are great coaches but because they are themselves high achievers as sellers. The company needs sales, but the super seller may not have learned how to motivate, engage, and cultivate the introspection needed to effectively drive the team’s success.A team that prioritizes super sellers for promotions tends to suffer further down the road. Talent development stalls because leaders focus on selling rather than coaching, leading to a diminishment of other crucial skills like account planning, customer experience, and relationship management. Average sellers become disconnected, and trust disappears.
Make more accurate sales forecasts
People need strategies to create more predictability in their processes. This is especially true for sales teams and for the super sellers attempting to guide them.
Leverage AI for real-time coaching
AI is here for you now. It is a tool with broad applications and is getting safer and more advanced all the time. Sales teams can use AI in coaching and training situations to give sellers personalized, data-driven advice in a way that feels nonjudgmental and actionable. The advantages of real-time feedback are many. It can help leaders make their coaching more nuanced, help sellers gain control over deals, and turn customer insights into continuous learning opportunities.
Turn super sellers into super coaches
Selling skills don’t always translate into sales leadership skills. You can create greater forecasting accuracy by empowering leaders to develop the sales talent in their teams. This will include sales coaching, but it will also extend to communication skills, relationship management, the ability to use AI tools and integrate them into a CRM routine, and more.
Implement an opportunity summary sheet
A custom opportunity summary sheet can help sellers review and assess large and complex deals more accurately. Include technical, architectural, and service elements of the deal in the summary, and run this by the pre-sales team. Every deal at the proposal stage must then be examined by leadership to validate size, timing, negotiating points, and stakeholder signoff.
Build a culture of practice
Doing something more often creates a greater level of accuracy and predictability. A golfer who practices putting every day will develop an accurate sense of where the pin is and how hard she’s hitting the ball toward it. Practice the different sales stages — discovery, qualifying, negotiating — to give sellers opportunities to hone their skills in an accessible, low-pressure way.
Reward early, active CRM use
In some organizations, sellers wait until very late in the process to put deals into their CRMs. This may be due to an expectation of harsh feedback from leaders or an attempt to avoid the appearance of failure. A better way is to examine and encourage pipeline health at all sales stages. Sellers should learn lessons from losses, and the company needs to accept that if it is not losing, sellers are not taking necessary risks to grow the business.By addressing the factors hindering predictability, leaders can guide their teams toward success with visibility, clarity and purpose. The world is shifting as we speak. However, if teams can develop a culture of adaptability and togetherness, they will be able to spot the way forward.
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You’re buckling in for an overseas flight in a brand-new Boeing 777. The pilot comes on the PA: “Ah, ladies and gentlemen, our flight time today will be six and a half hours at a cruising altitude of 33,000 feet. And I should mention that this is the first time I have ever flown a 777. Wish me luck.”
Before setting foot in the real world, pilots, military personnel and disaster response teams use intense simulations to learn how to respond to high-intensity challenges.Why should we place corporate leaders and their teams in situations without first giving them a chance to try things out? The risks are huge — new strategy investments can run into the hundreds of millions of dollars. BTS offers a better way to turn strategy into action: customized business simulations.
‘Now I Know What it’s Like to be CEO’
A customized business simulation of your enterprise, business unit or process, using real-world competitive dynamics, places leaders in a context where they step out of their normal day-to-day roles and gain exposure to the big picture. Participants make decisions in a risk-free environment, allowing them to experience critical interdependencies, execution best practices and the levers they can use to optimize their company’s key performance indicators. It takes the concept of a strategy and makes it personal, giving each individual the chance to see the direct impacts of their actions and the role they play in strategy execution.
Leading corporations are increasingly turning to business simulations to help build strategic alignment and execution capability when faced with the following business challenges:
- Key performance objective and new strategy implementation.
- Accelerating strategy execution and innovation.
- Improving business acumen and financial decision making.
- Transforming sales programs into business results accelerators.
- Leadership development focused on front-line execution.
- Implementing culture change as tied to strategy alignment.
- Modeling complex value chains for collaborative cost elimination.
- Merger integration.
Within minutes of being placed in a business simulation, users are grappling with issues and decisions that they must make — now. A year gets compressed into a day or less. Competition among teams spurs engagement, invention and discovery.
The Business Simulation Continuum: Customize to Fit Your Needs
Simulations have a broad range of applications, from building deep strategic alignment to developing execution capability. The more customized the simulation, the more experience participants can bring back to the job in execution and results. Think about it: why design a learning experience around generic competency models or broad definitions of success when the point is to improve within your business context? When you instead simulate what “great” looks like for your organization, you exponentially increase the efficacy of your program.
10 Elements of Highly Effective Business Simulations
With 30 years of experience building and implementing highly customized simulations for Fortune 500 companies, BTS has developed the 10 critical elements of an effective business simulation:
- Highly realistic with points of realism targeted to drive experiential learning.
- Dynamically competitive with decisions and results impacted by peers’ decisions in an intense, yet fun, environment.
- Illustrative, not prescriptive or deterministic, with a focus on new ways of thinking.
- Catalyzes discussion of critical issues with learning coming from discussion within teams and among individuals.
- Business-relevant feedback, a mechanism to relate the simulation experience directly back to the company’s business and key strategic priorities.
- Delivered with excellence : High levels of quality and inclusion of such design elements as group discussion, humor, coaching and competition that make the experience highly interactive, intriguing, emotional, fun, and satisfying.
- User driven: Progress through the business simulation experience is controlled by participants and accommodates a variety of learning and work styles.
- Designed for a specific target audience, level and business need.
- Outcome focused , so that changes in mindset lead to concrete actions.
- Enables and builds community: Interpersonal networks are created and extended through chat rooms, threaded discussions and issue-focused e-mail groups; participants support and share with peers.
Better Results, Faster
Well-designed business simulations are proven to significantly accelerate the time to value of corporate initiatives. A new strategy can be delivered to a global workforce and execution capability can be developed quickly, consistently and cost-effectively. It’s made personal, so that back on the job, participants own the new strategy and share their enthusiasm and commitment. This in turn yields tangible results; according to a research report conducted by the Economist Intelligence Unit and sponsored by BTS, titled “Mindsets: Gaining Buy-In to Strategy,” the majority of firms struggle to achieve buy-in to strategy, but those that personalize strategy throughout their organization significantly outperform their peers in terms of profitability, revenue growth and market share.
Business Simulations: Even More Powerful in Combination
Comprehensive deployment of business simulation and experiential learning programs combines live and online experiences. The deepest alignment, mindset shift and capability building takes place over time through a series of well-designed activities. Maximize impact by linking engagement and skill building to organizational objectives and by involving leadership throughout the process.
Putting Business Simulations to Work
Simulations drive strategic alignment, sales force transformation, and business acumen, financial acumen and leadership development, among other areas. A successful experiential learning program cements strategic alignment and builds execution capability across the entire organization, turning strategy into action. Results can be measured in team effectiveness, company alignment, revenue growth and share price.
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I recently read an HBR article discussing why the traditional approach to leadership development doesn’t always work.
It stated that instead of traditional methods, the best way to identify, grow and retain leaders to meet today’s demands is to “Let them innovate, let them improvise and let them actually lead.”
Over the past 30 years, as we’ve partnered with clients facing a vast range of challenges, we’ve seen the truth behind this – that people learn best by actually doing. That’s why business simulations are such a powerful tool: they allow people to do and lead within a risk-free environment, and condense years of on-the-job learning experience into a few days, or even hours.
We also know that learning is not just a “one and done” situation – it is a continuous experience. In many cases, a learning journey, which blends a variety of learning methodologies and tools over time, is the most powerful means of shifting mindsets, building capabilities and driving sustained, effective results.What a learning journey looks like depends entirely on the context of your organization. What challenges are you addressing? What results are you driving for? What does great leadership look like for your organization?
To bring this to life, imagine the following approach to a blended learning journey for aligning and developing leaders – in this scenario, within a financial services firm: Financial technology has “transformed the way money is managed. It affects almost every financial activity, from banking to payments to wealth management. Startups are re-imagining financial services processes, while incumbent financial services firms are following suit with new products of their own.”
For a leading financial services company, this disruption has led to a massive technology transformation. With tens of thousands of employees in the current technology and operations group, the company will be making massive reductions to headcount over the next five years as a result of automation, robotics and other technology advances.
This personnel reduction and increased use of technology is both a massive shift for the business as well as a huge change in the scope of responsibility that the remaining leaders are being asked to take on moving forward. As such, the CEO of the business unit recognizes the need to align 175 senior leaders in the unit to the strategy and the future direction of the business, and give them the capabilities that they need to effectively execute moving forward.
To achieve these goals, BTS would build an innovative design for this initiative: a six-month blended experience, incorporating in-person events, individual and cohort-based coaching sessions, virtual assessments and more. Throughout the journey, data would be captured and analyzed to provide top leadership with information about the participants’ progress – and skill gaps – on both an individual and cohort level, thus setting up future development initiatives for optimal success.
The journey would begin with a two-day live conference event for the 175 person target audience, incorporating leader-led presentations about the strategy. The event would not just be talking heads and PowerPoint slides, but rather would leverage the BTS Pulse digital event technology to increase engagement and create a two-way, interactive dialogue that captures the participants’ ideas and suggestions. Participants also would use the technology to experience a moments-based leadership simulation that develops critical communications, innovation and change leadership capabilities, among other skills.
romAfter the event, participants would return to the job to apply their new learnings. On the job, each participant would continue their journey with four one-on-one performance coaching sessions, in addition to a series of peer coaching sessions shared with four to five colleagues. They also would use 60-90 minute virtual Practice with an Expert sessions to develop specific skill areas in short learning bursts, and then practice those skills with a live virtual coach. Throughout the journey, participants would access online, self-paced modules that contain “go-do activities” to reinforce and encourage application of the innovation leadership and other skills learned during the program.
As a capstone, six months after the journey has begun, every participant would go through a live, virtual assessment conducted via the BTS Pulse platform. In three to four hours, these virtual assessments allow live assessors to evaluate each leader’s learnings from the overall journey and identify any remaining skill gaps. The individual and cohort assessment data would then lead to and govern the design of future learning interventions that would continue to ensure the leaders are capable of implementing the strategy.
As you can see, this journey design leverages a range of tools and learning methodologies to create a holistic, impactful solution. It’s not just a standalone event – each step of the journey ties into the one before, and the data gathered throughout can be used well into the future in order to shape the next initiative .
Great journeys or experiences like this can take many forms. In addition to live classroom and virtual experiences, there is an ecosystem of activities, such as performance coaching, peer coaching, practice with an expert, go-dos, self-paced learning modules, and more, that truly engage leaders and ensure that the learnings are being reinforced, built upon, practiced and implemented back on the job. We find that these types of experience rarely look the same for every client. There are many factors that determine which configuration and progression will make the most sense. There is one common theme that we have found throughout these highly contextual experiences, however – that the participant feedback is outstanding and the business impact is profound.
Leading with Purpose, Part 1
Most CEOs I speak with are not 100% at peace with their company’s purpose. As the market, their people and their business evolve, so will their purpose. As some of the best companies of past and present show us, there is strength, and even magic, in a great company purpose. What is also clear, however, is that this magic does not come from just having a “purpose” or “vision,” but rather from how well a company is executing against their purpose.
When Southwest Airlines (which has been profitable for 45 consecutive years, and on FORTUNE’s list of World’s Most Admired Companies for 24 straight years) was first starting out, their mission was to make flying affordable.1 They rallied their people on the idea that a grandmother should be able to affordably buy a ticket, at the drop of a hat, to get on a flight to see her new grandchild. This simple mission led to the “Southwest Effect,” which transformed the airline industry, and continued to be a lens with which the Southwest leadership team made key decisions.
Today, Southwest’s vision has evolved: “To become the world’s most loved, most flown, and most profitable airline.” And they are executing on this vision. They continue to drive superior shareholder returns against all industries on the S&P 500 (as they have for the past 44 years), and in 2018 were named the top low-cost airline in JD Powers customer survey reports for the second year in a row.
As the Southwest example highlights, great company purpose combined with a leadership team who will build the work-flows, culture, processes and metrics to live up to it can be an enormous employee motivator. But we have also experienced, both at BTS and with our global clients, that a good company vision and purpose on their own are not sufficient – employees need them to be even more personal to them as an individual. I remember a lunch I had twelve years ago with a 24-year old new hire who was my direct report. After some small talk he looked at me and said, “Why are you here? Why have you spent seven years with the same company?”
I’ll never forget that lunch. It was the first time I had been asked the question, and it was the beginning of a new decade where our employees were much louder and more active about wanting to reflect and spend time on our mission and purpose, linking it to their personal values and the impact they strived to have in the world. Luke, that 24-year old new hire, has made me and our company better as a result of his question.
In the last decade, there has been a growing emphasis in the business world on finding a deeper motivation to unlock greater meaning at work. For some this may sound ‘fluffy,’ or as one executive we spoke to commented, “Is this just the next version of the pursuit of vision and values? It sounds great on paper but too often makes little real difference as it tends to stay on the wall, rather than live in your heart.”
Yet your people spend the majority of their life at work and with colleagues. At its best, a sense of purpose is a way of bringing meaning to their work and understanding the contributions they are making to the company, as well as greater society. It makes sense, then, that employees who are clear on their personal and professional purpose end their work day invigorated and proud of what they’re doing instead of exhausted by mindless work that is bereft of real meaning.
According to a recent PWC study, 79% of business leaders believe that purpose is central to business success – but only 34% use their organization’s purpose as a guidepost for their leadership team’s decision-making. Signs that your workplace may be lacking organizational purpose are distracted employees and a lack of comradery. These are significant factors – so why don’t more organizations devote time to developing clear purpose and values? Well, developing organizational purpose is no easy task, and much of it starts with your own personal purpose. If you’re unsure of what exactly your own personal purpose is, have no fear – in the next two installments of this blog series, we will offer simple steps to help you uncover your personal and organizational purposes and get closer to leading through the lens of purpose.