By a show of hands, how many think Disney’s innovation will move beyond pilot, and provide positive financial returns?
Some of you say yes, but I have doubts. The programming task alone seems so daunting. I see a global team of software engineers trying to make Mickey’s elocution flawless, so he can pronounce names like Aaradh and Emilija without mangling the sounds. Someone has to sweat the details. Imagine hundreds of toddlers just inside Disney’s welcoming gates, inconsolable because Mickey or Snow White got digitally tongue-tied. “It’s OK, Sweetie. They’re just using buggy software.” Oh, the humanity!
Hitting revenue targets depends on the success of some pretty risky endeavors. I can hear the RFID salesperson right now. “An IT-enabled Mickey who never forgets a name? Sure, we can do that. How many wristbands do you expect to use in the first year?” Best not to put this one in the win column, at least not just yet. Eighty percent of new innovation projects fail. Sixty-eight percent of IT projects fail. Seventy-five percent of consumer packaged goods and retail products fail to earn even $7.5 million during their first year. Let’s face it: every day, sales professionals sell into an abyss that’s wide and deep.
And likely to become deeper. According to a recent article in The Wall Street Journal, “Companies large and small are trying to coax staff into taking more chances in hopes that they’ll generate ideas and breakthroughs that lead to new business. Some, like Extended Stay America, are giving workers permission to make mistakes while others are playing down talk of profits or proclaiming the virtues of failure” (Memo to Staff: Take More Risks, March 13, 2013).
Employees have become loathe to accept the risk of failure—a byproduct of a difficult economy. Their employers recognize this, but they also know that without innovation and change business strategies cannot succeed. Change of any type brings new possibilities for failure. To ensure that when employees are faced with the choice “innovate or die” they don’t select the latter, companies are prodding staff to take more risks by not penalizing them for failing.
Makes sense. But, hang in there with me, because here’s where things become weird. The very part of a company tasked with facilitating change—the sales organization—whose “change agents” face great risk and uncertainty every day, can’t tolerate failure. “If a rep doesn’t make quota, we don’t keep him around,” one District Sales Manager recently told me. “One would ideally see the median quota attainment at or slightly above 100 percent,” J. Mark Davis wrote in an article, Managing Sales Compensation in an Uncertain Economy.
The incongruities portend even more rancor between customers and salespeople. Customers are adopting a more nuanced and accepting view of failure, while sales executives are steadfast in remaining largely, if not completely, failure-intolerant. Salespeople will go nuts when projects don’t go into full production, or when they fall into the stasis of no decision. Who can blame them? Their very jobs could hinge on an opportunity coming to fruition, which means not only closing, but delivering fully on the anticipated revenue. That gravity extends to their district and regional quotas, and beyond. When a key opportunity or two tanks, the ripples are felt all the way to the CFO’s office. Meanwhile, customers will become ever more blasé. “Sorry about your quota, but, well, this is the reason we maintain a portfolio of projects.”
Increased buyer acceptance of project failure will have an inevitable impact on sales results, and revenue will become more inconsistent. Companies can manage that risk in other ways, for example, by building larger opportunity pipelines. But simply pummeling the sales force won’t create immunity to anything, except happiness. The job of selling includes failing—much as we might want to prevent its occurrence. That alone will bring buyers and sellers into closer alignment.
