Lori Harmon is the Vice President of Global Cloud Sales & Customer Success at NetApp and the author of a book titled, “42 Rules for Building a High-Velocity Inside Sales Team”. In this episode we get into the nitty gritty with Lori’s recommendations and advice about structuring a high-velocity inside sales team. We talk building your sales process, how to handle inbound vs outbound, hiring and enabling sales managers and so much more.
Andy Paul: Lori Harmon. Welcome to the show.
Lori Harmon: Thanks so much, Andy. Really excited to be here today.
Andy Paul: Excited to have you here. So where are you joining us from?
Lori Harmon: Yeah, I’m joining you from Redwood City, California.
Andy Paul: I almost bought a house in Redwood City once.
Lori Harmon: I think you’re probably happy where you are now in San Diego though.
Andy Paul: This was years ago. This was like, end of the eighties. and we were had, our first home was in Palo Alto and we were looking for a bigger home and couldn’t afford one in Palo Alto, but we couldn in Redwood city.
Lori Harmon: Yes, it’s a nice area. I think I’ve well, I’ve been here since about that time, late eighties.
Andy Paul: Yeah. Yeah, it was. I just remember the house was the, was a beautiful house and they’ve been recently remodeled and I forgot what part of redwoods is very close to the Menlo Park border, and, but the one we bought it from her backyard, she cultivated edible flowers. She had this big business, she sold to, sold those restaurants. Yeah. Yeah. So I guess she was just going to go restart someplace else, but yeah, we had all these edible flowers that would have been ours had we bought the house, but anyway, yeah, you mentioned, so you’ve been around since then, so how’d you get your start in sales?
Lori Harmon: Oh, wow. Okay. my major was in information systems in college, and so I was planning to be a computer programmer. And I co-oped with IBM one summer. I thought this is a great way to get out of North Carolina co-op with IBM somewhere else. And after co-oping for the summer, then I, in North Carolina, I went to California to do a co-op session. And that’s why I moved to California because I love the weather here. But while I was doing that, I realized that I really didn’t want to do that for living and all the people that I was working with said you’re way too social to be in this particular area, you need to go talk to the sales department. So I interviewed in San Francisco for a sales job at IBM. I got hired in like December and then once I graduated the next June, I moved back to California to go to work for IBM in sales, which in the end was a great decision. They had wonderful training and I never looked back from there.
Andy Paul: And so what product line were you selling?
Lori Harmon: I was selling printers and mainframes. Should I even admit that? Yes. So you can get an idea of how long ago that was when I was selling really large scale hardware products.
Andy Paul: Yeah, no, I got my start with Burroghs selling mainframes and so on. So yeah, no, I understand. Those days disappeared fairly quickly,
Lori Harmon: They did well, there’s still some large hardware out there, but I think I’m pretty happy that I’ve made the transition to software. And in particular, the cloud.
Andy Paul: So what was your journey after IBM?
Lori Harmon: Let’s see, after IBM being so close to Silicon Valley, I looked at my friends and wow, I felt like they were going faster and having a lot more variety of experience. So I decided to get from out of San Francisco, which wasn’t so much a Silicon Valley hub at the time and get down into the Valley. So I went to work at Sun Microsystems, so still hardware, a bit smaller. And, but I worked in their networking arena. So I was helping them with ether net, and token ring and things like that as a product manager. So I did move from sales, into product management for a bit. And then I moved to another company called network general, which also did security, the sniffer, which is a very famous product name. As a product manager, but after I was there for seven years and moved from product management, ultimately back into sales and I haven’t been in sales the entire time, I’ve definitely had a few other great experiences moving to different organizations to expand my breadth of experience and perspective. But sales has always been the home that I’ve come back to.
Andy Paul: I was going to ask the question then. So what do you feel you learned in those other experiences that helped you in sales? I, similarly, you know, I was in sales first four years of my career then I joined Apple back in the early eighties and worked in marketing for a couple of years. And then, the next company I worked in channels and finally I found my way back to sales. I did program management at one point, technical program management. Interesting for history major. But, yeah, I felt like all those things really contributed to sales. So what’d you think you learned, brought back to sales from those other experiences?
Lori Harmon: I think the number one thing is probably empathy. And so as a salesperson, you might be beating up your product team to get you a new product. But if you have a better understanding of what they have to go through to get that product out or what a product marketing person has to go through to position that product and make sure it’s resonating with the market and the research that they need to do just to decide what to do next. You may not want, you may not be any more patient in terms of the timing, but you certainly have a lot better perspective of what they have to go through to get that product to you. So I think it makes it for richer conversations that you can have when you’re talking to a product manager or product marketing person saying, “Hey, this is what I need. Understand, this is a lot of work for you or understand your process, how can I help you to get it to me faster,” that type of information. Certainly have understand the perspective from marketing. Since I have also spent some time in marketing and doing demand gen it’s always been challenging to get enough leads for the sales organization.
And I spent some time in professional services and customer support. So I know what it’s like to get beat up a lot. And so having empathy and trying to think about, I really need to make this, I need to sell the right product to this customer so that when they get activated and onboarding the products are right fit. So that ideally the customer’s not having to call support very much and they’re happy with their product. And then they renew. Versus trying to cram something in that maybe isn’t a good fit just to make my number.
Andy Paul: Yeah. Good fit both externally and internally. Absolutely. Yeah. Yeah, because the impact is of, it’s not a good fit for the customer. It’s not a good fit internally then. Yeah. You’re a drain on resources.
Lori Harmon: Absolutely. Everybody’s tight on resources. So we want to maximize that. So I would say empathy is the biggest thing that I learned, but certainly just knowing what those teams have to go through. Is very helpful and figuring out the bigger picture for the organization, because I think as salespeople or especially sales leaders, we can’t have siloed thinking. We have to have a broader perspective than that.
Andy Paul: So that’s an interesting point. I was going to actually, I had one of the questions I asked you a little bit later, but I’ll bring up now is just whole point about siloed thinking is, has this marketing sales divisions like run its course? I is the time to like completely rethink how these two organizations are brought together and restructured in a way that reflects how we want to work with our customers?
Lori Harmon: I think that is a great point and a great question. So, I do think it’s time to rethink it. How quickly will it change? I think it’ll still take a little bit of time. One of the things that we’ve recently done at NetApp is we brought in a new president and under the president sales and marketin. Are both reporting into the president.
So instead of sales being going up to the CEO and marketing, going up to the CEO, we’re all in quote unquote, the same organization at one level down. And I do believe that’s going to bring things closer together. At the same time, I’ve heard some discussion and this is more from like the Gartners and the McKinseys of the world, about how, in some cases, companies are setting up merged marketing and sales teams to go after a specific market, whether that’s a vertical or some other segment, some other go-to market for that particular company, but it is a group that like, you’re not in a marketing and sales team, you’re in a single team together. So I think that’s where you get into the big part of rethinking how marketing and sales work together.
Andy Paul: Yeah, by thinking that even I’ve got through this simple split and I actually read this from the guy that followed it for a few years online is his contention was what we should do is just the world should be split into two parts. One is acquire, one is retain, and those are two organizations. That’s all we do. We acquire new customers and retain customers and what would it look like, the organizations look like if you did that?
Lori Harmon: Okay. that’s a good perspective because the other thing we’re looking at is a little bit broader. it includes the acquire and retain, but it basically says acquire, which is, have generate the interest and then there’s land, then there’s expand. And then there’s scale or slash retain. And so we have a couple more boxes in our thought process, but what would it look like? I definitely think on the acquire side today, what we see in that bucket is marketing put stuff in there, and where you might have an SDR or digital sales team doing that qualification. But what if the, what if marketing and sales were we’re both in that acquire team? Because I think that’s a lot of the times where you say, Oh, Hey, we’re not getting enough leads or, Oh, we’re sending you all these leads.
And then the sales side of it’s but they’re not good quality. There’s a lot of back and forth on that and trying to make it work as organizations who report into different leaders. If you all report into one leader and you had a number, whether that number was number of trials, number of sales qualified leads, or maybe it was a different number, if you all were measured on the same number, maybe it’s revenue, who knows what it is then you definitely all work in tandem together to get the job done. And right now it’s theirs, even though, even if marketing is measured on revenue, there’s still seems to be a gap in that part of it, just in the acquire part. And there could be other gaps because along the way, once you get into the land, expand and retain, maybe you have a customer success team supporting those three areas, what is marketing’s role? It should be to help with that expansion, and help with that retention. And then you’ve got to ask yourself, how are they doing that? They’re certainly notifying customers of opportunities to buy other products that are complimentary, but what else do you know what, what’s the expanded role there?
Andy Paul: Yeah, yeah, maybe it’s. I said it’s maybe there’s no longer just one marketing organization, but there’s marketing in the retain side land and expand, retain. And then the, not in the land, but that’d be part of the acquire group in my mind. But, but there are company’s doing things different. I know a company here in San Diego area that I, I worked with. Years ago in one of our first handful, few handfuls of employees. And, yeah, they’re a multi-billion dollar organization. They don’t have a sales function. They don’t have a VP of sales.
Lori Harmon: interesting. What are they, what do they have? They are chief customer officer. Is it something even different than that?
Andy Paul: Even, I’m gonna be doing some, hopefully some interviewing with them about this as it’s just it’s just a different structure altogether. And it’s, it has its roots from where they came from as initially as a defense business, selling tech into defense, but they’re very diversified.
Now they have consumer products that got software, hardware. Still sell to defense, but it’s yeah, it’s possible to grow a business without having a sales function.
Lori Harmon: That’s very interesting. And I think there, it makes more sense now that things are becoming more digitized and buyers are pushing more for digital and or remote experience, there’s still the fac, maybe there’s not face-to-face in-person today with the pandemic, but there is still definitely there’s face-to-face on zoom or whatever other screen sharing you have, but there’s definitely a clear preference for a buyer perspective to have to allow them to be more independent and make their own decisions and if possible, buy digitally, then the backup to that is to have a remote experience and that, okay. If I really have to I’ll have a face-to-face meeting. Does that apply to every single buyer? Certainly there’s larger accounts that may not go through that exact process, but I would say the majority of companies are pushing into that direction.
Andy Paul: Yeah, cause we don’t know what’s going to come .
Lori Harmon: We don’t.
Andy Paul: That’s possible. we didn’t, maybe if we go two years without any significant face to face, then why can’t we go 20 years without it.
Lori Harmon: It’s true. Absolutely true.
Andy Paul: But I think at some point, because I think this is relevant to the whole discussion about the role of automation, AI, and machine learning. And so on. And sales that’s been discussed endlessly is that yeah reach a point where I think that real human interaction is a differentiator. And I think we sort of, I’ve almost feels like to me, many organizations have gone too far to try to take that away, thinking that the cost of acquisition doesn’t justify it. When actually when you look at factor in maybe how you can increase your odds of landing the business, then it more than justifies itself.
Lori Harmon: I think the key reason to have those AI tools is to give sellers more time to have to build those relationships. Even if they’re having to do it remotely. If it’s feather, whether it’s via email or chat or on a social media platform or on the phone or zoom. You want to free up their time to build that relationship.
And you have to be careful. I agree if there’s, if it’s too many bots answering something from a potential buyer, you have to know when is the right time for a human to insert themselves in that process. And I think that’s, it’s maybe difficult to figure that out, but that’s really the key behind the science is figuring out when is the right time? When does the buyer wants to talk to you? When are they conversation ready? So you’re not going in and the buyer’s Whoa, I don’t want to talk to you, but you’re not taking so long to get into the conversation that they’re frustrated. Hey, I really wanted to talk to somebody and I can’t because how many times have you tried to contact a company and you can’t get in touch with them? So that’s too far to the other side.
Andy Paul: Yeah. I look at it. If you’re talking, if you’re in a conversation with a customer, it’s because they want your help, but I don’t want your help. They’re not gonna talk to but if they’re going to answer the phone, if they’re gonna talk to you, if they respond to an email. They’re in the midst of something that they’re interested, they’re gonna need some help. And this is for me is, where the role of the human really plays the, the central role in sales is, yeah you’re not going to replace that with a bot or a machine learning tool driven tool of some sort. It’s yeah, this is, you know, this is serious. This is contextual. This is, emotional. This is human. This is your place to differentiate.
Lori Harmon: Absolutely. I think that is the key right there. It is a place to differentiate because at the beginning of some of these tools, they were saying, Oh, it’s going to replace sellers, but that’s just not going to be the case. And I don’t think it’s ever going to be the case. the only place there they’re replaced is on maybe consumer things like Amazon, but not when you’re buying more complicated technology-based products, it’s just simply not possible.
Plus there’s so much competing information for the buyer. Typically, at some point they need to talk to a human, to sort it out, help me figure out which piece of information is telling me the truth and help me really verify that your product A versus product B can do what they say they’re going to do.
Andy Paul: Yeah. So here’s something an interesting question for, I think is so year and a half ago, almost two years now. Gosh, almost two years. Yeah. Gartner comes out with their buyer enablement study and they’ve got their famous diagram of the buyer experience and buyer journey, which is this very complex, dense flow chart. They call it the spaghetti diagram. Cause it looks like. Let’s throw a handful of spaghetti on the wall.
Lori Harmon: Yes, very familiar with that diagram.
Andy Paul: Yeah. but I, and I talked to hundreds of CEOs and sales leaders on the show and I’ve never really talked anybody that said him and said, yeah, we look at that. And we said, yeah, we should try to align our sales process with their buying process. And I was wondering, is this part of the problem we’re facing is that we’re just not aligned with how the buyer wants to buy and therefore perhaps leaving ourselves open to them exploring other ways to buy.
Lori Harmon: That’s a great concept because I think there’s the way the buyer might want to buy and then there are the realities, which I believe were on the Gartner chart, which is, Hey, if I’m a buyer, Personally, I just like to go evaluate the products and pick it up myself and say, we’re doing this, but clearly I’m not the only decision maker.
Oftentimes I can’t say, okay, IT we’re going to use this. Or if we’re going to use something for a bunch of sales teams, Oh, those other sales teams probably want to have a say in that. And since it has to work with the market, the marketing has to feed into it in some way. Marketing might want to have a say in it. So it was really impossible for a buyer to have their own streamlined process. So therefore the spaghetti situation happens, but you can’t align to a bowl of spaghetti. So I believe that you have to have, I guess you have to think of key points, the key information you need, but then you have to figure out where is the buyer and their process.
And hopefully they can not only articulate that, but maybe they can articulate what else has to be done to finish their buying process. But often the buyer gets surprised by something that happens to their company. So I think the key thing is you can’t totally align to that process because it’s not linear. You simply have to be flexible as a seller and intuitive and sensitive to where your buyer is. So if they’re going to go backwards, they’re going to go backwards and then you have to try to help them to move forward again or help them to educate some of the other buyers. What is it? I think it’s 11, an average of 11 buyers today. So you have to help them to somehow educate the other 11 buyers. To get on your, get on the same page with you so you can take the whole group forward together if that’s even possible. But as it’s really about flexibility and empathy and understanding,
Andy Paul: I agree, a hundred percent. I back to the diagram thought just last point, is yeah Gartner laid out the four jobs that the buyers need to do. The identified problem defined solely, define the problems, identify solutions, finalized their specifications or requirements and choose a vendor. And what’s interesting is I, again, talked to so many people, is that so many sales organizations, I just focused at that last box, select the vendo. And yet to me, all the action happens the first three boxes .This is where you influence the choices they’re going to make about how they’re going to solve the problem. And I know if I get designed in at that stage, then when they go to select the vendor, Hey, I’m the inside track.
Lori Harmon: I think as soon as, not Gartner it’s, either it’s Forbes and Forrester both have a stat that’s very similar. It’s around 70% of the decision is made on the purchase before they contact the salesperson. So exactly what you said is correct. The company or the sales rep potentially, but the company has to be involved with that buyer process early on.
So when they’re doing the research. Your digital information has to be out there in the right places for them to find your company so that as they’re researching, you have to have compelling content that ideally will lead the buyer to choosing you as certainly one of the vendors that they proceed with through the rest of the steps of that process. So eventually when they are willing to talk to a salesperson, you’re at least somewhere on there list.
Andy Paul: Yeah. I think it’s interesting. There’s so much controversy about that figure, right? Cause their adherence to that, or there’s other camp that says nah, cause if you’re out making proactive cold calls, the people are proactive, outbound, they’re not in a process til we contact them.
Lori Harmon: That’s absolutely true. Sometimes they may. And we do that a lot here. We have a lot of proactive outbound that we do, and we definitely uncover opportunities. And maybe it’s a bit earlier, maybe they said, okay. Yes we’re going to do that. And we’re going to do that in three months or six months, but you’re still there early enough so that when they’re poised to do that, ideally, you’re the first name on the list that they start looking at, or they call you and say, Hey, I got this big process. Can you just help me get through my process? So it is definitely all about timing. And I do agree that you can get on the front end of the process with those types of contacts or the other thing is if you’re not, then you’re going to rely on the fact that the buyer is out there searching for something. So you need to be find-able.
Andy Paul: Yeah. Yeah. I’d rather not rely on serendipity though. It does. It does play a big role in sales more than people want to admit.
Lori Harmon: it’s true. You just have to know all the people you need to contact in all your, all the people in your sweet spot. You’ve really need to be able to get to those in some way, because you don’t know what their timing is until you actually connect with them.
Andy Paul: Exactly. Exactly. So back to you, The question I ask my guests these days, a standard question. The only one I have the standard is who taught you how to sell? Who is the big influence on you and setting aside, you’ve got this baseline of experience, we all learn through our experience, but yeah, who was the big influence? Was it like a coach? Was it a peer or a customer? A company provided training? What was the thing that was really did it for you?
Lori Harmon: I would say it was company provided training. So clearly the IBM foundation is always a great thing to have, but when I worked at Network General, they introduced us to the Sandler Sales Methodology. And in that particular one, there’s a lot of sales methodologies out there, and I have not been exposed to all of them, but you come in and you have this two day training and then you have the opportunity to go through a year long process where once a week you can go at the time, you could go to a facility and it would be people from other companies there and you would basically practice, you would do, be doing role-playing and bring up real life sales scenarios on a weekly basis for an entire year, it was called their presidents club. So I feel like that is what taught me the best sales skills and really taught me how to sell because it was ongoing. it was basically will have your own private coach and you could even call a person up that was running the weekly session at any time and ask them about specific sales situations that you were in and they could give you advice. So I feel like because it was a year long and because it was ongoing, I was able to really internalize that sales methodology. And that was what taught me how to sell.
Andy Paul: So basically like company bought a subscription for you with the local Sandler chapter.
I think it is an interesting model for how we help enable sellers and train them as is that sellers are given like a stipend, because so few companies actually do training these days. And they’re real questions about the efficacy of the classroom training, companies coming in and training your people. But something like this, it’s like, wouldn’t we better served, taking some of that budget that we might spend on third party trainers and say, yeah, you may still use that third-party trainer, here’s a stipend you, as a sales person can use this year. You have to use this year, not can use, would have to use this year to get yourself skilled up.
Lori Harmon: I think so it is a good approach. It has to be paired with the fact that then the management at the company, the leadership there. They all have to speak that language, right? So if it’s Sandler, if it’s some other methodology, everybody has to do it. You can’t opt out of the training. And every manager, when you’re doing your forecast calls, your pipeline reviews are having conversations about opportunities. They’re using that language and making sure to quote unquote, test you on whether you use that sales methodology as part of your selling process. And they’re using it up the chain because without that reinforcement, I think salespeople can go off and do it, and then those that are really self-motivated will internalize it and use it. But the adoption may be low because even though salespeople are generally self-motivated, I think there’s probably enough lone wolfs out there who would say, yeah, whatever I’m going to go do my own thing and their own thing may or may not be the most effective approach.
Andy Paul: Yeah. It’s interesting thought I just think about us is yeah. I’m I have to admit, I’m always conflicted about this idea that you have to have a common methodology across the organization, because I think. Yes, common language out makes sense. But the fact is people learn differently. They execute differently and not all frameworks work the same for people. So it’s, I sort of get it. I’m interested in this idea about how we coach and train performance improvement in sellers, because I think we do, we speaking as a sales profession in general, do a really bad job of it.
And, yeah, just looking at the data points of CSO insights and quota attainment and all these other things. It’s you’re, we’re missing a beat somewhere and so what, we’re, what we’ve been doing, what we’re spending $20 billion a year in sales training, the United States to get the sort of output it’s maybe we should be doing something differently. My thought is just throw it out is I think the real hurdle to sellers getting better is the lack of quality on the sales management. Because that’s where I think most of the learning comes from. Is, mostly from the immediate supervisor. And, we put so much on the plates of these people yet we don’t enable the sales managers. We don’t train them how to coach it. We don’t train them how to, work with someone to improve their performance. We presumed a certain degree that they know
Lori Harmon: I think that’s a very valid point. We don’t enable them to coach because we’re not training them. And I was actually just on a call this morning or just on another webinar this morning, listening to something about that exact topic. And if you look at how much work sales managers have to do, and most of it is internal requests. Oh, they have to do a QBR. They have to do this presentation. They have to get this report. And not every company has fully enabled automation for those reports. So a lot of that can end up being manual. So they end up spending so much time fighting internal fires or maybe there’s a deal and they’re fighting an internal fire to get something approved on that deal. It’s still an internal issue versus spending most of their time externally and with their reps doing coaching, assuming they know how to coach the reps. So I think one is lack of time to coach, but let’s say you find the time. Do you have the insights about the reps you need to coach them? And then have you been taught to coach reps? There’s very few seminars on how to coach. There’s seminars, as we talked about on here, sales methodology. So I guess you could learn if you learn the methodology, you could learn to coach it potentially, but there’s other things to coach on. And when do managers learn that? I don’t see a lot of sessions out there or a lot of trainings on here’s how to coach your reps.
Andy Paul: Yeah. so I’ll put you on the spot a little bit, since you were on a large, you were on a large sales organization, so you’re part of the problem, right? Cause you’re you have these expectations for your managers is, if we want to change things, when we look at what, and people listen to the show and I’ll know exactly where I’m going is why don’t we emulate like sports teams, for instance? Where they have specialized coaches on staff, that deal with various aspects of performance? So why do, why should managers, coach? Why shouldn’t it just be another position in a sales organization? We have someone who’s trained how to be a coach and let them coach the people. Why does the manager have to do it?
Lori Harmon: I think it depends on the piece of it. I really liked that. In fact, one of the things I carved out this year, to have in my organization on the operation side was a sales enablement head. And whether you call it enablement or acceleration or efficiency, that can be debated, but part of this person’s role was going to be, and they just aren’t hired yet because it went on hold. But part of it was to help us with setting up some of our tools. So one of the tools we use is Xant. And so with that, it manages your cadence and you put the messaging in to the tool, right? So if you want to do a, particular campaign on a certain use case, you can use that messaging. And so part of it was to set that up and then, because managers don’t have time to actually monitor.
So first of all, are the reps following the cadence? Second of all, is the messaging working because with the product you can actually look at engagement, customer engagement. And so they would be offloading and saying, okay, this content is not engaging, so let’s go get some engaging content to help the sales person to be more successful.
Oh, these reps are not following the cadence. And their performance isn’t as good as the reps that are. So we need to go coach these reps on why it’s important to follow the cadence, or maybe the cadence isn’t working at all. We need to change the cadence. So maybe they’re not doing all of the coaching for the manager, but they’re doing some more of the tactical coaching and maybe they’re looking at activities and are they doing the right activities, but I think maybe the manager still is working with them on the specific information on how to do a sales call or building your pipeline or things like that. So I was looking at having a bifurcated model, so not fully offloading the manager, but offloading them in a certain area where I really felt that the sales enablement role was actually a new role, not for a company because there’s lots of sales enablement, but it was more justified by the fact that the tools today require. A resource to make sure that the tools are working properly and that people are actually properly using the tools. So it was a piece of the coaching.
Andy Paul: Some of that though, tools not withstanding, is just human to human, right? It’s just, how can I help you? What are you struggling with now? What can we help you? Where might you be deficient? I troubled by this idea and after decades and sales is, that we imbue management with these sort of heroic qualities that they’re all knowing all, seeing all capable, which is just unrealistic, right? Because we don’t train them. We don’t support them. Had a guest on the show a couple months ago that had written a book about first-time managers that, the average age at which a manager gets, their first management training is 42. After they’ve been in sale after they’d been in management for 10 years.
And this is management in general, not just sales, but take that as a starting point. It’s yeah. It’s like, how can we expect to improve sellers to improve their performance if managers are also not being enabled to improve their performance.
Lori Harmon: That is a crazy statistic. And I completely agree. And I would think, that kind of goes more back to the company. The company needs to have different kinds of training, leadership, training, management training, and then you get into specifics sales management training. So there’s the role-based training, but there’s also general like leadership. Companies put together leadership programs and they teach you just basic management and then sales management, I think is an offshoot from that.
Andy Paul: Yeah. I think that one of the problems I see is that given the advent of so much technology into sales, which, most of us would have killed for back in the early days. You and I started our careers well, before this got started. But we sortof maybe over rely on them or we don’t use them in the appropriate way. And there’s a tendency in some organizations to, be so compliance, oriented, right? Gotta use the process, got to use the tools in a certain way. And as a result, people aren’t encouraged being encouraged or coached to become the best version of themselves, which is really ultimately, we want the best version of that person out representing the company and talking to the customers.
And to me, this is like a roadblock and it’s, I think part of it is, as I talked before, I think it’s, we’re not doing a good enough job of enabling managers. So they are fearful to work outside the process because, hey, this is the sanction process and it doesn’t work. We can say the problem was the process, not me as an individual.
Lori Harmon: Yes, that is another interesting point. And sometimes you have to think about how can you work outside the process? There’s definitely, you can be very creative on sales calls and come up with creative deal strategy if you know how to do that. But wouldn’t it be great if you could just say, I’m not going to send you the materials for that QBR because I’m going to go sell something. Wouldn’t it be great, but that’s where you get into, I’ll get fired for doing that or a, how’s that going to flow? Cause it was my manners. You’re going to tell the CEO, Hey, we’re not going to have the slides for this review.
Andy Paul: I can tell you how it goes. I can tell you how it goes, because, so I worked for a company in Mountain vVew that got acquired and, big company acquired, but the division of the big company that acquired us based back on the East coast and the CEO is just this horrible individual. And yeah, I was running international sales and I just, after going to one of the quarterly meetings, as every quarter when we had them, I was either in Asia or Europe. It was just funny how it worked out. And finally, after about a year, they came back and said, yeah, you can’t do that anymore.
Lori Harmon: Oh, I see. I see. At least you had a year to go do what you need to do,
Andy Paul: and that’s yeah. That’s when I started listening to recruiters at that point again.
That’s definitelyLori Harmon: one way to solve that situation.
Andy Paul: Yeah. So a question for you is, and so we meant to talk about your book but we’ve had all this great conversation. We’ll have you come back again and we’ll talk about it, but there was one topic that’s this is a sort of aligned to what we’ve been talking about is I feel like we don’t measure the right things when it comes to performance and productivity. And I’ll throw this out to you. It is so quota, let’s take quotas has quota outlived its usefulness? And I asked this because first of all, no, one’s making it right. A small percentage of people are making it comparatively. And yeah, the idea of quota as a measure of performances, it’s obviously with Goodhart’s law.
So Goodhart’s law is he was an economist British economist, and he said, when, when a measure becomes a target, it loses all value as a measure. which is what quota is. And the reason being is it says, is that what happens is you optimize your process to achieve the target rather than optimizing performance And so we have all this technology, we can collect all tons of different sorts of data is I advocate saying, why don’t we. Instead of doing that, maybe I’m, better way to look at things. And this comes from my own experience. Having managed organizations doing this as is, what if we look at what real productivity is and sales, and for me, it’s not activities. It’s how many dollars of revenue per hour of selling time, because a seller generating. Because you know, time is the basic inventory that we have as a seller. And so isn’t it time to really. Look at that differently. And so for me is if I know how productive in a revenue generating sense in a unit of time a seller is it gives me a lot more information to say, what levers can I pull to really move the needle with this individual, as opposed to this mass quota.
Lori Harmon: That’s true. I guess you can. you could technically calculate that. You could look at what they produce, but then you have to divide it by number of hours, but do you really know what number of hours is because how many hours is that seller really working? They’re probably not just working 40 hours a week. And if they’re doing it-
Andy Paul: Per sales hour though, because we know we can know from our tools, Are they on the phone? Are they sending an email? We have enough, we don’t capture all the activity for sure, but I’ll give an example. So again, back a couple of decades ago, managing two different companies actually managed this way. They had their basis in the defense world. And as a result, we had to capture everybody’s hours, everybody in the company filled out a time card.
And so what I did and I came in and said, Oh, that’s interesting. So instead of having salespeople charged to an overhead number, which they were doing, and he said, we get a qualified opportunity in the pipeline. We put a job number to it. And then you have to charge your time. And the sales engineers charged their time. Everybody charged their time to that job number. So I knew, and I was getting reports monthly, how much revenue people are generating per hour of sales time. And suddenly you start seeing the real differences between people, because you’re going to have, three people, all meeting quota and have the vastly different productivity rates. And I just felt okay, let’s give me a lot more information to use on an individual level to drive better performance with individuals to help them get better, rather than just that blanket statement of quota.
Lori Harmon: Yeah, I think that’s pretty interesting. I guess my question would be, this is not something we get answered here. How many companies have that level of insight to be able to make that shift? I think obviously some companies have very sophisticated tools and they really are able to look at activities and how much sales time knowing that you’re not, like the activities, not the most important thing, but ultimately certain types of activities do lead to outcomes and results. And so how many companies are able to really measure their seller’s time and what they’re doing there in that time? No, cause is it sales time? Just the time you’re spending with a customer because there’s still going to be okay. I have to prepare a quote or I have to do this internal thing.
Andy Paul: That would be sales time.
Lori Harmon: So I think it’d be interesting to know how many companies can really measure down to that level, because then you could have that kind of measurement in terms of. What they’re producing during their sales time, or if we were back to the older day, the pre pandemic days, how much time are they spending traveling? Do we need to cut that out so that they could be more productive or whatever the thing is that needs to be cut out to make those people more productive, which sounds like you had tremendous insights in that one role where they’re tracking everything hourly.
Andy Paul: But here’s an interesting thing. It wasn’t about giving them more hours. The core was what are they doing with the hour they have?
Yes. There’s only so many sales days in a year.
So that’s really becomes because, if you ask most sales leaders, what’s your sales capacity? We’ve got, 10 sellers, they all got, $10 million quota. So no, our capacity is a hundred million dollars. I was like, no. I said, if you have somebody that’s, they can is their productivity rate is, X number of dollars per hour of selling time. And roughly how many hours on general hours of sales time they have per year, then you got a real number that tells you what your capacity is, your baseline is and how you can improve it.
Lori Harmon: And I’ve seen people trying to make those hypothetical, like assuming, okay, we have this much sales time and we can do this. But what they really don’t know is what people are doing during those sales hours.
That’s the key.
Yeah. And that is really the key. You have to have that before you can make that shift.
Andy Paul: Cause I hear talk to people and read things all the time. People say, Oh, the way we’re going to fix our quote unquote productivity is we’re going to free up time for our reps, more time for our reps to sell. And yeah, I was having those conversations 40 years ago with people and it hasn’t changed, the same fraction, it’s roughly the same fraction of time people actually spend actively engaged in sales, roughly a third of their time. And even with all this technology and tools we have and enablement. I think you could spend a lot of time trying to push that noodle up a Hill and it’s not going to change. So if we think that’s not really gonna change rather than tilting it, that windmill is all right let’s fix what happens inside that hour.
This is what I think more focus needs to be put on
Lori Harmon: Yeah, I think first you have to be able to track it in it and easily, right? You can’t like they were logging time cards back your 20 years ago in your job. How could you easily, automatically, and there are tools to do that essentially track their time. So you can see where, where are they doing?
Busy work and. Why is it, why are they doing busy work? Can I help you offload this busy work? Is there some other thing as a company that needs to be automated? So you don’t have this busy work to give you truly more selling time. And then you’ve got to make sure if you’ve done that they’re actually spending that time in sales activities.
Andy Paul: Spending it effectively in activities. They do.
Lori Harmon: there’s yeah. The effectiveness, because then you got to go down to the level of, okay. They had a sales call, but how do you know what was said? The interaction on that sales call was effective and that’s just probably another tool to solve that problem and meaning that you can get conversational analytics to figure out if that particular time was productive. But I love the concept.
Andy Paul: Okay. good. I feel better. All right. Laurie, we’re gonna have to cut off here, but we are done. We’re gonna have you back. We’re gonna talk about your book, cause I really enjoyed your book and, Yeah. One of the topics I want to talk about is yeah, what’s changed since you wrote it. That was like five, six years ago. Because things, some things have, I think that we’ll definitely have you back and we’ll talk about that. So if people want to connect with you, how can they find you?
Lori Harmon: they can find me on LinkedIn. That’s probably the best way to find me is look up Lori Harmon on LinkedIn.
Andy Paul: It’s so funny over the course of five years of doing this podcast and 800 plus episodes is just watching people. When I first started asking the question, I was always there giving their email and the phone numbers, and now it’s only LinkedIn. So things have changed.
Lori Harmon: They have changed and I look forward to our conversation about other changes too.