Change Management

If you think you have the situation under control, it just means you’re not moving forward fast enough.

Tom Peters

You may decide to implement changes in your organization aimed at improving your business, which ultimately translates into greater profits. However, as we all know, the road to hell is paved with good intentions, or “the best laid plans often go awry.” To effectively manage change, you need not only free time but also some additional knowledge.

What are changes for?

I believe that the people reading this article are already looking to make some changes in their lives. They either already have a business and want to improve its efficiency, or they have decided to start their own business, or they have identified some issues in their current business and are seeking ways to fix them. However, I want to emphasize that a constant desire for change is a necessary condition for success. When we ride a bicycle, it doesn’t fall over because the spinning wheels act like a gyroscope, keeping you upright. You stay in the saddle as long as you keep moving. If you suddenly stop, you will fall right away. If you are looking for stability in business, you are actually looking for a way to exit the arena. Sooner or later, one of your competitors will come up with something new. Others will pick up on this innovation and start working more efficiently, leaving you and your business as just a part of history.

Steps.

When implementing changes, it’s important to know the set of simple steps outlined by John Kotter that will lead you to success.

See the problem.

Even if the business you run has been traditional and standard for 120 years, it doesn’t mean that everything is running smoothly and perfectly in your specific company, or that there are no problems at all. If you think you have no issues, it means your rationalizing mind is hiding them from you. If you do have problems, it means you haven’t been able to solve them yet. In both cases, it often makes sense to ask someone from the outside to assess the situation.

For example, it’s unlikely that all your salespeople are performing perfectly. Some do better, while others do worse. Is this a problem for you? It seems not. Business is going well, and profits are coming in. Consider that every ineffective meeting with a client may cost you not just a specific contract, but also that client and the referrals they could have provided. We find it difficult to communicate and attract clients mainly because unprofessional individuals have come before us, discouraging clients from engaging with salespeople.

Imagine how a mushroom picker would feel walking through a forest and seeing mushrooms and berries trampled by a group of schoolchildren who later claimed that there were hardly any mushrooms in the forest and that they only found a couple. If you were leading a group of mushroom pickers, how would you feel about one of your overly enthusiastic “quiet hunt” lovers who tramples more than they collect?

It’s the same in business; one unsuccessful contact can close the door to a company for you simply because your company’s name was mentioned. Therefore, analyzing the performance of your salespeople, identifying bottlenecks, and correcting the situation is crucial. This should be done urgently, as soon as you have the opportunity. After all, every day of delay costs you money—money you could have earned today and tomorrow.

Often, a problem is simply impossible to notice without an outside perspective. You can’t really assess how effectively you are working, can you? Yes, you can read insightful books, attend workshops, and gain some knowledge. Of course, you will learn something new and notice aspects of your work that need improvement. But are you sure that’s all that needs to be fixed? However, here we will discuss change management not within yourself personally, but within the team you manage.

The realization of the necessity and urgency for change.

Let’s assume you’ve already identified the problem yourself or someone helped you see it, and now you need to take action to fix it. Any independent actions you take will be perceived as arbitrary decisions, misunderstood by your salespeople and managers, and ultimately sabotaged. Additionally, you are vulnerable to mistakes caused by your position, as you may not see the nuances that those closer to sales do.

The first step is to present the problem to a respected member of your team—someone who is open to the thoughts and ideas of others, whose opinion is valued by the rest, and whom you consider one of the best salespeople or managers. You need to show this person the problem, discuss it, and most importantly, listen to their reasoning regarding the issue. Your goal is to “sell” them the idea that the problem exists and needs to be addressed as soon as possible. By listening to their arguments and reasoning, you will gain a straightforward model of feedback from the entire team. It’s better to hear their thoughts now and carefully work through responses and solutions than to later debate with a crowd. After meeting with this person a few times, you may even start to identify initial solutions to the problem.

Let’s take a specific example. You noticed that the compensation system for your salespeople has become less attractive in the job market compared to what competitors are offering. All your salespeople might soon switch to competitors, and it’s becoming increasingly difficult to recruit newcomers. You meet with a “sympathetic leader” in the sales network and share your impressions, listen to his opinion, and together you come to the conclusion that the compensation system for salespeople needs to be changed.

It’s important to remember that whenever you implement any changes, there will always be an individual or a group that holds influence and respect, and who will resist those changes. In the case of the commission, it’s clear that simply raising the commission is not a solution, as you are already paying so much that you are operating on the brink of loss. Therefore, changes are necessary. However, not everyone will view these changes positively. Some may see them as a threat to themselves, others as a threat to their reputation, and still others as a threat to their income, and so on.

Thus, a crucial step in implementing changes will be finding a group of supporters or like-minded individuals. It’s essential to keep a close eye on the source of the threat and, when the opportunity arises, to neutralize it. Such individuals can certainly gather others and promote their point of view. A good opportunity would be to unexpectedly appear at such a meeting, wait for someone to notice you, and ask you to comment on the speech of the “opponent.” Using only the most important and indisputable facts and arguments, you can decisively put the “opponent” in their place. Unlike them, you will already have a solid grasp of the entire argumentation base, having engaged in open criticism with the leader and prepared for possible objections.

Team

Once you have one like-minded person on your side and you understand how to present the idea of change to the rest of the employees, you need to create a team that will support you. Gather such individuals from your organization and, with the help of your supporter, explain to them the essence of the problem and the importance of addressing it immediately. The team you assemble should consist of leaders, people who can communicate effectively with others, analyze the situation, and understand the urgency of resolving the issue. You will need to empower these individuals to collaboratively develop a solution. You may already have a solution in mind, but you are unsure whether the sales network will respond positively to it, and you might not know if there are other viable ideas worth considering. The key is to discuss this solution with your team and take the right steps. Your team will help you bring in new ideas, analyze the situation with competitors, gauge the sentiment among your salespeople, and so on.

Solution

If we take the example of changing the commission structure, after analyzing the situation and discussing it within the team, you found that among your salespeople, there is a portion that is not contributing much business but still receiving compensation. Working with them distracts the sales managers, and if they were let go, it would free up resources to increase the commission for the remaining salespeople. Additionally, after reading this book, you proposed the idea of paying a fixed portion as a guaranteed commission instead of a salary, and creating an “elite” group of salespeople who would earn significantly higher commissions than the others, even at a loss for you. You all agreed that simply getting rid of the ballast by firing employees is not desirable, as it would demoralize the network. Therefore, it was decided to restructure the commission into a base commission and a bonus. The new commission without the bonus is slightly less than the old one, while with the bonus, it is slightly more than the old one. The sales level required to qualify for the bonus is set so that 50% of all salespeople will definitely receive it, another 25% will be able to catch up, and the remaining 25% are precisely the ballast that, under the new conditions, will simply “fade away.” Even if these individuals do not resign, the savings on their commissions will allow bonuses to be paid to those who deserve them. The team approved these initiatives but rejected the idea of an “elite,” stating that there is currently no “elite” in your network and that this can wait. However, everyone agreed on the idea of a “guaranteed commission,” with the condition that salespeople should not earn less after the reforms than they did before. Now you need to understand what exactly needs to be done and what the new reality will look like once the changes take place. The changes will involve the commission now being paid in two tiers, which means:

• You need to update the algorithms for its calculation in the accounting system.
• Sellers will now strive to reach the “bonus” commission level and will aim to sell more.
• Some people will leave your sales network, and they will likely go to competitors – so be it;
• ·     Refusing a salary and switching to a “guaranteed commission” allows you to advertise attractive commissions in the job market while also offering a good “rate.” Salespeople from other networks will be drawn to you, and you’ll need to onboard and integrate them into the team.

So be it.

Now that the goals and objectives are clear and you know how to address any possible objections from others, present the new strategy to all the leaders in your network. You need to ensure that as many people as possible understand what this is about, why it is being done, and support you.

In order for changes to take place, you need to address all the issues that stand in the way of their implementation. You need to prepare all the necessary paperwork related to the changes, draft new contracts with vendors, order an update to the accounting system, and so on. A list of tasks and actions should be compiled before you announce the changes to everyone. When announcing the changes, you must specify the date when everything will take effect, and you can only know this if you have a ready project for implementing the changes and have appointed responsible individuals who will be required to complete certain steps on time.

Once the changes are implemented, you will need to find a way to demonstrate some success. These should be small victories that can be achieved in a short timeframe. You must ensure that the flow of salespeople has turned around, with the bad ones leaving and the good ones coming in. You will need to identify successful salespeople who have received bonuses. You should show that the majority of salespeople are earning more rewards than before, and so on. Such signs of success should be demonstrated as quickly as possible.

Don’t relax after your first success! You need to keep working harder and longer until all the changes are implemented, and in our specific case, until the final act of completed work is signed off by the new commission. The further and deeper your changes go, the more people and effort need to be involved until you reach the next stage of your company’s existence.

New World

After implementing changes in the sales system, you may encounter the issue that salespeople might think that since changes have happened once, they will continue indefinitely. Most importantly, none of them know whether these changes will lead to better or worse outcomes. If you’ve done everything right, any changes you make should be perceived by the network as an improvement rather than a deterioration of the situation. However, healthy human skepticism understands that positive changes can be temporary. If your changes have led to negative outcomes, the network needs to understand why they were necessary and why there was no other option. In this situation, no one knows what tomorrow will bring, and once again, people may think that tomorrow will be worse. What do you need to do?

1. Do not deny that there will be no more changes;

2. On the contrary, it should be shown that the essence of the changes was not in the changes themselves, but in the transition to a new, dynamic state where changes are possible in the future and you have the tools to implement them. For example, you developed a contract format with sellers that allows for easy modifications without significant bureaucratic hurdles.

3. Explain to the network that frequent changes are not beneficial for either you or the sellers, and that changes will occur no more often than once in a certain period. For example, once a year.

4. Tell us how these changes were implemented, how you consulted with people in your network before putting them into action, and that you will always continue to seek their advice in the future.

5. Show them that it’s not in your nature to make changes retroactively, deceiving people’s expectations.

In our example with the commission, we will state that one of the goals of transitioning to the new reward system was to introduce a bonus as a tool for regulating commissions in the future. In the future, only the threshold for bonus payouts will change, while the bonus itself will not decrease but will only increase. You will, of course, continue to adjust the reward system to adapt to market conditions, which is why you have provided for the contract with sellers to be implemented as a one-page document referencing a larger general document that outlines the rules of the system. However, any changes will not be made without discussion and will not be applied retroactively. The most important thing is that by becoming more dynamic, your company has gained a significant market advantage, and this dynamism will now be used in the competitive struggle for the benefit of the entire sales network.

Practical aspects

Pilot projects

Often, when you present a plan for certain changes, whether they are small changes like starting to work with a new product or larger changes like transitioning to a computer system for tracking transactions in remote offices, you will encounter the idea of a “pilot project.” The concept is that if we are unsure of the outcome, it makes sense to test it on something that we can afford to lose, and then decide whether to implement it across the entire sales network.

Of course, when you want to try something completely new, some stage of idea testing is still necessary. However, if you are facing the need for change, any trials can be potentially fatal for the project and the company, especially in sales.

In sales, many factors depend on the personality of the seller, the segment of buyers they work with, the region where the sales take place, and so on. After conducting a pilot project in one of the sales offices and achieving some results, you won’t know exactly what led to those results. If the pilot project didn’t succeed, no one can pinpoint the reason. Perhaps the seller personally didn’t like the idea, maybe the buyers weren’t the right fit, there could have been clear sabotage from the “conservative league,” or there might be a dozen other reasons. Therefore, any pilot projects in sales should not be used to evaluate results; instead, they should be utilized to refine the solutions necessary for implementing complex changes. Additionally, pilot projects are more applicable to clearly technical tasks, where the implementation algorithm is outlined but may change due to certain facts or phenomena. However, when it comes to implementing intangible aspects—those described in documents—and changes that directly affect sales results, the pilot project stage is unnecessary.

New product

One of the frequent changes, and at the same time one that seems simple at first glance, that you make or will make among your salespeople is the introduction of a new product. Practically, all the stages described above must be followed—from recognizing the need to solidifying the effect. However, here we are dealing with the fact that the changes affect not only our network of sellers but also external clients. This is where we may encounter a rather specific paradox. When introducing a new product, you are primarily “selling” it to your salespeople. You explain its benefits, why it should be included in the product range, and how it is useful to customers. Additionally, you will likely offer some motivating promotion to encourage sales of the new product, only to find that the salespeople will complain that the product is not in demand, and your sales of other products may even decline. What happens is that, inspired by your presentations, the salespeople rush to the customers and enthusiastically tell them about the new “magical” product and how they need to buy it immediately. Customers will not understand the urgent need to purchase this product and will respond with a refusal. The salespeople will waste their time ineffectively and will not manage to sell the existing products during this reporting period, which they could have sold more leisurely by identifying the customer’s needs and offering appropriate solutions. The new product should not have been offered before a conversation with the customer clarified what they actually needed.

Only after going through a phase of rejections and disappointments do sales stabilize, and the new product finds its place in the lineup.

When presenting a new product to your sales team, it’s important to clarify right away that it is not some magical solution that will boost their sales by 200%. It’s unlikely that the new product can be labeled as “flagship,” since 90% of your customers’ needs are already met by the existing range. When discussing the new product, you should immediately outline the consumer niches where it can be offered and what questions can be asked to determine whether it’s worth continuing the conversation about selling the new product.

However, we shouldn’t forget about the promotional campaign, as otherwise, the sellers will simply forget about the new product.

Motivation

Any motivating campaign is a change in the lives of salespeople. It’s essential to go through all the stages of implementing such a change. The importance of communication cannot be overstated. If you’ve announced a contest where the prize is a trip to tropical islands, make sure that every salesperson remembers those tropical islands. This could even include printing beautiful posters to hang on the inside of bathroom doors.

If you are changing the commission plan or offering new career conditions, be sure to pay attention to information and communication. Everything you say at the general meeting is likely to be misunderstood or not understood at all. Moreover, people will forget what they were told, will ask each other for clarification, and will get even more confused. Present your changes in the form of simple bullet points and, once again, keep reminding everyone about them. Flyers, brochures, posters, and regular sales reports should contain the new information so that you can be sure everyone understands correctly.

Any initiative you have is also a change for the salespeople. If you suddenly want all the salespeople to wear bow ties, they need to at least “buy into” the idea. It’s extremely difficult to force them to do something against their will. They should show enthusiasm on their own and correct each other. Why a “bow tie”… Maybe you sell musical instruments, and such an outfit brings you closer to potential customers.

Existing contingent

Understanding what changes are important for your business, you should be aware of who you are currently working with. For example, if you have always believed that commissions are all you owe your salespeople, then you will end up with salespeople who need nothing more. Any initiatives you undertake to build a system of control and training aimed at increasing sales productivity will be ineffective, as your salespeople are individuals who operate on the principle of “don’t bother me, I’m working for myself.” They didn’t become this way; your company simply has people of this type left. They are ineffective in sales; otherwise, they would have already started their own business and are clearly dragging you down.

When thinking about changes, understand who your people are right now and how to replace them with others who are more productive, or how to communicate with them to instill new values and encourage them to work in new ways.

Additionally, a specific group of sellers will remain with you after natural selection if you treat them poorly. If you constantly criticize, belittle, or scold them, only those who can tolerate you will stay, and they are not the best individuals. You won’t achieve the desired results in sales by changing your behavior. They won’t understand you or appreciate your efforts.

Look at people and look at yourself before implementing changes.

Conclusions:

1. There is always a need for change. Stability lies in movement.

2. Any changes must be made in a specific order. Starting from recognizing the problem and the need for urgent action, to understanding our state after the changes and what lies ahead.

3. When organizing changes, it is important to gain the support of part of your team, which will need to be gradually increased over time.

4. Any changes should be made according to the approved plan. Without an implementation project outlining the steps, deadlines, and responsible parties, you cannot begin.

5. After implementing changes, it’s important to quickly demonstrate a small victory.

6. Constant readiness for change should not mean constantly anticipating it. Sellers need to understand when and what will change in the future.

7. It is not always justified to test a new idea in a “pilot” project mode.

8. Implementing a new product doesn’t always lead to increased sales. Sometimes, it’s the opposite.

9. It is important to promote the changes, their benefits, and advantages among the salespeople.

10. Changes are often difficult to implement because the existing group of sellers has adapted to the current conditions, which, while not the best, are familiar to them.