complexity
This Seems Complicated
Wednesday, March 11th, 2009 | Compensation Plans, EIM, Project Direction, SPM | No Comments
In fact, all of these items are likely to affect the performance of your sales force. A recent Scientific American article by Wray Herbert describes a concept related to our brains’ processing. Herbert discusses the possibility that how a task is described may affect our willingness to do the task and, if we decide to do it, how difficult we expect it to be. Herbert notes that psychologists are interested in “the complex interplay of effort, motivation and cognitive crunching” and cites a study conducted by two University of Michigan psychologists, Hyunjin Song and Norbert Schwarz that investigates the notion.
In the study, Song and Schwarz presented all test subjects identically worded instructions for a task. Some subjects received the instructions printed in the easy to read Arial typeface while others were printed in an elaborate difficult to read font called Brush.
Herbert’s article comments that “there are many ways to make something mentally palatable – or not. You can use clear, straightforward language or arcane vocabulary words; simple sentences or convoluted sentences with lots of clauses.” To simplify the experiment’s execution and provide a scientifically sound apples-to-apples comparison, the psychologists chose to simply vary the font.
The findings were quite interesting. One of the tasks used in the test was the making of a sushi roll. Those given the Brush font instructions estimated that the task would take longer and be more difficult to accomplish and, most importantly, that they would be less motivated to attempt it than those given the same instructions in the easy to read Arial font.
Your sales compensation plan is in many ways an instruction set for your sales force. This study demonstrates that something as seemingly inconsequential as a font choice (albeit Brush font is hideous) can have a measurable statistically significant effect on the perception of a task’s complexity. Compensation plan designers and comp administrators should certainly not underestimate the potentially negative impact of very complicated plan component calculations. In fact, most experienced plan designers are well aware of this. We get a lot of requests from clients asking for help in “simplifying” their plans. Perhaps less obvious are the potential impacts of the clarity of the compensation plan documentation and even the document’s font. Don’t underestimate the impact of even small changes to your compensation program. If there is a choice of comparable options, opt for the simpler. If you can’t tell which option is simpler, present plan communication options to a test group and ask for feedback. Ask them what they’d be motivated to do after reviewing the plan. Be careful not to confuse your sales force; selling is complicated enough.
Similar Posts:
- Can you explain your company’s sales comp plan to a 2nd grader? - MichaelStus
- What’s Your Magic Number? - MichaelStus
Beware of unneeded system flexibility
Sunday, October 26th, 2008 | Project Direction, large projects, requirements | No Comments
Software package implementation including EIM/SPM software can be a complex process and many projects are not successfully delivered or are done so over budget. One issue that often causes trouble on projects is the introduction of functional flexibility that is ultimately unneeded. Many times when a business owner is asked about a particular business function there is a tendency to overstate the need. For example plan sales compensation plan administrators often say they need the ability to change a particular commission rate or rule effective at any time, even multiple times within a pay period. In reality based on how the compensation plan is constructed, it may make no sense to do so and the practice may actually never be done this frequently.
Why should software systems implementers and the eventual owners worry about this unneeded flexibility? The simple answer is that if these requirements make it into the final feature set to be delivered, costs can increase dramatically. The direct relationship between feature addition and development and delivery costs is obvious. Additionally, in severe cases of unneeded feature bloat, the system may become undeliverable. Finally, unneeded flexibility may result in a system with increased complexity causing higher post implementation maintenance and operational expenses.
What drives the introduction of unneeded requirements for a software system? Several that I have experienced:
• Business owners do not want to restrict themselves – Business owners do not often find themselves being asked what they want in a new software system. Not wanting to blow this chance, they have a tendency to cloud attention to true practical business need with a kid in a candy store mentality. Additionally no business owner wants to be remembered as the one that gave in on a system requirement that down the road hinders business function. Erring on the side of caution for a business owner means always answering requirements inquiries with the most flexible feature rich driving answers regardless of true business need.
• Limited access to true statistics on business process – A well designed system should best satisfy the automation of business tasks that are most frequently performed and that are most critical to success of the enterprise. Often though, true data about the frequency at which certain business events or functions occur is not known; project timelines often discourage proper analysis which would provide data crucial to the best requirements set determination.
• Inexperience among requirements gatherers - Business analysts or others who have been assigned to gathering system requirements may lack the experience to ask the right questions of more seasoned business experts that will own the system being developed. Additionally, if these business analysts are not familiar with the workings of the proposed software, they miss opportunities to steer or corral functional requests into the most implementable options.
How can this issue be addressed? More education about system delivery process across all members of the project team can help. Business owners and business analysts can benefit from a better understanding of how the software works. Additionally these team members should not be isolated from the development and eventual operational costs associated with the decisions on requirements and feature set determination. Requiring business owners to justify requests with real statistics about the frequency of occurrence of scenarios driving their inclusion can help distinguish absolute from exaggerated need. Finally, understand going live with a system with the critical subset of all desired functions is an option; plan for additions but allow time for the evolution of business process that certainly take place with its introduction to dictate their priority. Encourage all parts of your delivery team to keep these ideas in mind; sacrificing some functional flexibility is well worth avoiding a poorly designed, difficult to operate, or undelivered system.
Similar Posts:
- EIM Solutions Resist Commoditization with Supplementary Features - MichaelStus
- There’s Value in the Journey - JasonKearns
Can you explain your company’s sales comp plan to a 2nd grader?
Friday, August 29th, 2008 | Compensation Plans | No Comments
We’re into the 3rd quarter of the year and your sales kickoff meeting is approaching. Now is probably the time of the year your organization begins to think about the sales compensation plan and what modifications will be made for the coming year. Something you might think about: Can you explain the sales compensation plan to a 2nd grader? I’m not talking about the prodigy that has composed 2 symphonies and is in her 3rd year of medical school, just the typical 2nd grader. Is this hyperbole to make a point? Perhaps, but there is typically far too much complexity in comp plans. What are some signs that your compensation plan is too complex?
Sure, a sales compensation plan should reinforce behaviors consistent with strategic direction and operational philosophy but it should also be easily documented. In most cases, one page should be more than adequate to describe the compensation plan payment rules including a sample calculation. If the plan document is longer than this, ask yourself why. Should it really be any more difficult to understand than this? Your sales force has more important things to worry about.
Every component that makes up the sales compensation plan should have a clear reason for being there. What exactly is the reason for the rolling twelve month component? Why do we pay an extra 2 percent for selling product group A compared to product group B? If your average sales rep cannot explain the motivations behind each component than there might be an issue.
How many hours per pay period are your compensation administrators spending handling questions or disputes about pay. The cost of their time is compounded by the cost in lost sales of the person on the other end of the phone. How much time spent in disputes is too much depends on many factors and is difficult to quantify. However, if a particular component of the compensation plan accounts for an inordinate amount of dispute time, maybe it’s time to give it the 2nd grader test.
Similar Posts:
- Sales compensation program change considerations - MichaelStus
- This Seems Complicated - MichaelStus