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SPI Insight: Selecting and Developing Sales Talent with Employee Assessments

This eBook covers:

How to determine if your existing talent is capable of executing future growth
Essential features of effective sales hiring assessments
Why personality assessments alone are inadequate
How to identify who you should choose as your next sales manager

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SPI Insight: Selecting and Developing Sales Talent with Employee Assessments

  2. 2. 2© Sales Performance International, Inc TABLE OF CONTENTS SELECTING & DEVELOPING SALES TALENT WITH EMPLOYEE ASSESSMENTS 01: CURRENT SALES TALENT VS. FUTURE GROWTH CanYourExisting Sales Talent ExecuteYourFuture Growth Strategy? (Pages 3-4) 02: THE THREE ESSENTIAL FEATURES OF TOP- NOTCH SALES HIRING ASSESSMENTS Elements Of Effective SellerAssessment (Pages 5-6) 03: THE PERSONALITY TRAP Why Personality Assessments Alone Are Inadequate ForSales Hiring (Pages 7-8) 04: TOP PRODUCER OR NATURAL COACH Who ShouldYou Choose asYourNext Sales Manager? (Page 9)
  3. 3. 3© Sales Performance International, Inc CURRENT SALES TALENT VS. FUTURE GROWTH CAN YOUR EXISTING SALES TALENT EXECUTE YOUR FUTURE GROWTH STRATEGY? By Dave Christofaro, Talent Analytics Practice Leader, SPI To say that markets are changing rapidly in response to many forces is an understatement. For example, we described in our recent book, The Collaborative Sale, how buyer behavior is changing dramatically as a result of easy access to information, increased globalization, the rise of Millennials in business, the shortening time of competitive advantage, and other factors. New disruptive competitors, backed by deep-pocketed venture capitalists, can pop up overnight. Take the example of HR software start-up Zenefits, which recently announced that it had just raised a whopping $500 million in VC funding – giving them a total valuation of $4.5 billion. Zenefits is bent on disrupting this sleepy and regulated industry, just as Uber disrupted the taxicab trade. As a sales leader, you know that you need to constantly evolve in the face of these kinds of dramatic changes, or you will be left in the dust. As you adapt your sales strategy to align with your changing corporate strategy, have you also adapted your sales talent strategy to follow suit? In other words, is the team that got you to your current state also able to fulfill your new growth strategy? DEFINING SALES TALENT We have observed that most sales organizations struggle to define what “good” and “great” salespeople should look like. They typically default to the characteristics of people who have succeeded in the past. This is not, altogether, a bad idea. However, as your business requirements change, your sales roles and the definition of excellence in these roles are also likely to change – and in the face of dramatic business changes, your previous definitions, based on what worked before, may quickly become dead wrong. For example, we have a client in the software industry that grew primarily through acquisition. Acquired entities operated autonomously and were usually left alone, as long as they made their respective growth and profitability numbers. Although the profile of top performers varied somewhat across divisions, many of their sellers were strong product specialists who excelled by really knowing their product and by positioning features and benefits to technical buyers. Asvaluationsforsoftwarecompaniesskyrocketed,fueledinpartbybubble- like conditions in the VC market, good acquisitions became much more costly. Our client’sleadershipteamhiredawell-knownstrategyconsultingfirmtoevaluatetheir direction, and then decided to transition from growth through acquisition to organic growth. Slowly but surely, they started to integrate divisions under a common go- to-market strategy that focused on selling a comprehensive enterprise solution to C-level buyers. Some previous top-performers continued to deliver good sales results, whileothersstruggledbadlywiththetransition.Weusedoursalestalentassessment expertise to help them understand why. We started by developing a competency model for their future-state C-level solution seller and supporting roles. While each model will be unique for every organization, we leveraged our competency library and pre-existing profiles as a starting point, and then refined it iteratively to develop a valid competency map. We then identified the target proficiency levels for each competency in 1
  4. 4. 4© Sales Performance International, Inc each role. We used a proficiency level scale from 1 to 4, with 4 being the top. Not everybody needs to be level 4. One may only need to be level 3 in a competency in order to perform a role sufficiently. Then, we assessed each incumbent to determine their proficiencies and identified gaps to close. Once we gathered the data, our industrial and organizational psychologists crunched through the statistics to build performance models. This enabled them to determine which competencies make the most impact on sales results and isolate the behaviors of top performers – the critical sales competencies. Out of more than fifty sales competencies, we identified the four most critical ones, enabling our client to focus on what mattered the most. By identifying the critical sales competencies and proficiency levels for the roles necessary to support the new strategy, our client was able to take the guesswork out of their hiring decisions. It also enabled them to provide tailored coaching for the individual and development to current salespeople, based on their true needs. They now have a much more systematic way of ensuring that their sales talent is able to deliver on their new business strategy. ENSURING STRATEGY AND SALES TALENT ALIGNMENT When you make significant changes to your sales strategy, it is important to define your new sales roles clearly and to develop accurate competency models for these roles. The bigger the strategic shift, the more likely the model of a top performer will be different from what it was before. Assessing your team against a competency model that is aligned with your new strategy will help you determine where people need help to make the transition successfully, and give you a benchmark for hiring new talent into these roles. Has your sales strategy changed recently? Download a free white paper about ensuring you have the sales talent to fulfill your new sales objectives and goals, or to register for a free webinar on how sales talent analytics enables you to align your sales team with your company strategy.
  5. 5. 5© Sales Performance International, Inc THE THREE ESSENTIAL FEATURES OF TOP-NOTCH SALES HIRING ASSESSMENTS ELEMENTS OF EFFECTIVE SELLER ASSESSMENT By Dave Christofaro, Talent Analytics Practice Leader, Sales Performance International At this moment, an online search for “sales hiring assessment” delivers over 46 million hits. But here’s a dirty little secret: most of these assessments don’t significantly improve the accuracy and quality of new hires. Statistical analysis of generic assessments indicates that they can only improve the likelihood of hiring the right sales candidate to a maximum of around 50 percent - which means that you will likely be wrong more than half the time, at best. In other words, most sales hiring assessments provide about as much certainty as rolling dice. You can ensure that you select the right sales hiring assessment by following a few simple guidelines: 1. Use assessments that measure KSAs The most common type of assessment is a personality assessment. However, every serious research study on assessments show that personality scores have almost nothing to do with job knowledge, skills and abilities (KSAs). The performance of sales candidates who bring success in the shortest amount of time is based far more on KSA’s than their personality. Personality can be useful for evaluating a candidate’s cultural fit within an organization, but be sure to also include knowledge tests, as well as behavioral interview guides and/or role-plays/simulations for demonstrations of skills and abilities. 2. Don’t use “off-the-shelf” assessments – tailor them to improve PV In the world of assessments, validity refers to how well a test or assessment actually measures what it intends to measure. Predictive validity (PV) is how accurately an assessment predicts future success and it varies by assessment type. “Off-the-shelf” assessments that have not been tailored to the specifics of a job role have the lowest PV. (Schmidt and Hunter, The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings.) 2
  6. 6. 6© Sales Performance International, Inc 3. Place heavy emphasis on behavioral-based assessments Behavioral-based assessments are probably the best type for helping hiring managers drill deep into a sales candidate’s skills and abilities. In sales hiring, structured behavioral interview guides and role-plays or simulations are commonly-used examples of behavioral-based assessments. Remember, the candidate sitting across the table is a salesperson, so they canprobablysellthemselveswell.Role-playsandsimulationshelpseparate the wheat from the chaff by having the candidate demonstrate their skills and abilities, rather than just talk about them. CONCLUSION The increasing use of pre-hire assessments for sales candidates is undeniable. However, don’t trust every assessment tool on the market. Be wise when deciding on what assessments to use. With an improved and more well-informed approach, you can reduce chances of hiring the wrong person to less than 15 percent – and your sales team’s performance will be dramatically better in a much shorter time. Download a free white paper that describes the value of sales hiring assessment, and how you can use this to develop tailored performance development programs for your own organization.
  7. 7. 7© Sales Performance International, Inc THE PERSONALITY TRAP WHY PERSONALITY ASSESSMENTS ALONE ARE INADEQUATE FOR SALES HIRING By Dave Christofaro, Talent Analytics Practice Leader, Sales Performance International Personality assessments, such as DISC or Meyers-Briggs, have an understandable appeal. They are well-known and generally inexpensive. However, according to research by I/O Psychology expert, Dr. Frank Schmidt, the predictive quality, or validity, of personality assessments for selecting productive sales hires is far inferior to other assessment methods. As the graph below shows, personality tests ranked near the bottom of predicting success in a job, and other assessments methods scored much higher. This is consistent with our research and experience working with our own clients. Even in sales, personality alone rarely correlates to success in a job. Using an inexpensive but also ineffective tool comes at a high cost—the increased chance of making a bad hire. Research data proves that using personality assessments as the primary assessment during hiring results in bad hire rates as high as 50 percent. Let that soak in… 1 out of every 2 new sales reps could be the wrong fit for your company. The subjective nature of personality assessments in hiring also places hiring organizations that use them at risk of violating Equal Employment Opportunity guidelines.CornellUniversityHRReviewrecommendsusingextremecautionwhen using personality assessments for hiring. Needless to say, to depend so heavily on a questionable tool could lead to costly mistakes and potential legal action. IT’S ALL IN THE KSAS Personality tests simply don’t provide hiring managers enough relevant information about the candidate’s ability to succeed in the job. It only gives one dimension when you need to be looking at the whole person. Knowledge and behavior are also extremely vital components for identifying productive sales hires. According to research by Schmidt and Hunter, the factors that ultimately drive performance and effectiveness are knowledge, skills, and abilities (KSA). The success rate of hiring the right person with assessments that measure KSA, combined with a structured interview process, is about 70 percent. This is more than three times better than when using personality assessments alone. Again, this is consistent with our own research and client experience. Rather than using personality tests alone, you should use an assessment that measures the traits that correlate to success in a sales role. This means… 3
  8. 8. 8© Sales Performance International, Inc 1. Creating competency models for each role to identify the competencies that drive success and the corresponding proficiency levels. 2. Evaluating candidates, relative to these standards, with a multi- measure assessment that measures these competencies. 3. Adopting a uniform hiring process to consistently evaluate candidates, and training your hiring managers in behavioral event interviewing skills to uncover the right information to make the best decisions. This approach doesn’t just help you make better hires. It enables consistent evaluation of candidates against established standards, which reduces bias in your hiring process. So, stop wasting resources on personality assessments and risking a bad hire. Save yourself the headache in the long run and look towards things that are more reliable and accurate. Wave goodbye to the personality approach and say hello to KSAs. Download our Checklist of Effective Sales Hiring Tests to help you make the best choice.
  9. 9. 9© Sales Performance International, Inc TOP PRODUCER OR NATURAL COACH WHO SHOULD YOU CHOOSE AS YOUR NEXT SALES MANAGER? ByDaveChristofaroandJamesTouchstone,Directors,SalesPerformanceInternational Sales leaders face a challenging dilemma when promoting or hiring a sales manager. You’ve probably heard warnings about simply putting the best salespeople into management - it doesn’t always work well. Wayne Gretzky was the greatest hockey player of all time, but not the best coach. The same was true for Isiah Thomas, Pete Rose, Bart Starr and Diego Maradona in their respective sports. But, if you don’t always promote an elite performer, who do you select? Do you promote an average seller? Or, hire an outsider who isn’t familiar with the nuances of your business? It’s a difficult decision - and one that can make or break the performance of a sales team. It’s hard to know the answer until you understand each candidate at a deeper level, and how they fit against an ideal profile of a good sales manager for your organization. Picking the “best” candidate depends on how well you define what a “good” sales manager looks like for your team, validate that definition, and apply the model consistently in sales management selection and development. To start identifying the traits you should consider, download our sales management competency and attributes listing. While we find a diversity of competencies and skills in the management ranks of our clients, there are certain characteristics that all effective sales managers must possess. These common characteristics include: 1. The discipline to manage systematically The most effective sales managers use a systematic approach. They establish a routine cadence for inspection and coaching, and conduct pipeline and opportunity reviews regularly. Most of these managers are former sellers who achieved their numbers consistently by developing, perfecting, and executing sales with a high degree of discipline. 2. The desire to help others improve Sales managers must also have the will to coach and develop others. Notice that we say “will,” but not necessarily “skill.” Some competencies can be more easily trained and learned than others. You can train managers incoachingskills,butifthey arenot naturally inclinedto coach,thenthey will not apply those skills effectively. 3. The courage to ask hard questions Courage is another important trait that we see in effective sales managers. They must have the courage to ask tough questions about opportunities that may create discomfort with a “happy-eared” sales rep, or cause a rep towalkawayfromadealbecauseitdoesn’tmeettheminimumqualification criteria. A good sales manager needs courage to confront challenges that they encounter in the sales process. Courage is very difficult to train, since developing the self-confidence to cope with risk and uncertainty comes only with experience. We’ve assembled a list of essential sales manager competencies and attributes to consider when evaluating candidates on your team. Download this list to develop your optimal sales management profile and make identification of your next manager easier. 4
  10. 10. 1 0© Sales Performance International, Inc WHERE TO DOWNLOAD ASSETS? 01: FREE WHITE PAPER Learn How Sales Talent Assessment Can Ensure That Your Team Is Aligned With Your Changing Business Strategy. 02: FREE WHITE PAPER Learn The Essential Elements Of An Effective Sales Hiring Assessment Program. 03: FREE CHECKLIST This Checklist Includes Sales Hiring Assessment Tools, And Improves Your Chances Of Selecting The Right Sales Candidates By Three Time OrMore. 04: FREE CHECKLIST Download This Useful List To Help You Identify Your Next Winning Sales Manager.
  11. 11. 1 1© Sales Performance International, Inc ABOUT SPI Sales Performance International (SPI) is a global sales performance improvement firm. We help the world’s leading companies drive predictable revenue and profitability growth by optimizing sales organization performance. Founded in 1988, SPI has been the leader in helping global companies apply process and methodologies to transition from selling products to marketing and selling high-value, customer-focused solutions. Our extensive sales performance expertise, deep industry knowledge, global resources, and verified results uniquely position SPI as the go-to firm for organizations seeking to gain a competitive edge by how they sell. SPIhasassistedmorethan1,500,000salesandmanagementprofessionalsinmore than 55 countries and 15 languages to achieve higher levels of sales effectiveness. ABOUT THE AUTHORS Dave Christofaro is SPI’s Talent Analytics Practice Leader who is focused on providing sales talent optimization services for effective assessment of sales teams, and enabling improved hiring of sales professionals. James N. Touchstone is SPI’s Director of Learning and Development, responsible for the creation and enhancement of advanced sales methodology and skill enhancement programs. He is also co-author of The Solution Selling Fieldbook.
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