We recently just dropped an ebook entitled, “The Value of Values: How Your Sales Compensation Plan Reflects Your Company Values. Building on the foundational framework that holds an organization together, in this blog we’ll explore how company values can be the backbone of success, but only if everyone’s on board! Our very own Grayson Morris, CEO of Performio had a few nuggets of truth to drop on us.
Company values provide organizations with an ethical framework to guide their business. They help to ensure that all employees are on the same page, working together toward a shared destination and with a shared understanding of what matters most.
But staying true to company values can be challenging. Values raise the stakes and can force you to make difficult decisions. And when it comes to sales in particular, it can be tempting to sidestep company values for the sake of expediency. When that happens, it can create a disruptive rift between your stated values and the actual values that guide decisions. Priorities change, and it ripples throughout your organization in ways that can dilute your reputation, brand, and culture.
At Performio, we work hard to live up to our own values, while equipping hundreds of other sales teams to live up to theirs. And in this article, we wanted to dig into what company values really mean for a sales organization. So we sat down with our CEO, Grayson Morris, to talk about his experience navigating Performio’s values, and learn what advice he has to offer.
We might first ask, why have company values at all? From a strictly pragmatic and business-oriented perspective, what’s the point of them?
The answer Grayson offered is that clearly defined values provide concrete expectations for behavior. They not only guide the decision-making process, but also enable consistent feedback, along with a basis for discipline or removal as needed.
Without company values, an organization would lack an objective basis for making certain difficult personnel decisions. They’d have to make a call based on gut feelings or what seems appropriate—and that’s going to vary from one manager to the next, not to mention among employees as a whole.
Your salespeople represent your organization to customers, and you want those interactions to be anchored in your values. If you wouldn’t want your sales reps to exhibit certain behaviors—those that damage public perception of your brand—then you need company values that ensure your sales reps know what’s expected of them.
And internally, the highly competitive nature of sales can easily lend itself toward a toxic working environment if there are no shared values to guide employees’ behavior toward each other.
Company values codify the kinds of behavior employees are expected to exhibit, help to maintain the kind of culture reps want to work in, and provide accountability, making it possible to take action to enforce those values when necessary.
As we spoke with Grayson, a few key themes emerged. Staying true to company values requires specificity, planning ahead, intentionality, and commitment.
Organizations typically express their values in a few short, catchy phrases. That’s intentional, as it makes them easy to remember and repeat. Performio’s values, for example, are as follows:
However, if we stopped there, it would be pretty hard to apply these values in any sort of objective or consistent manner. What does “play to win” really mean when it comes to doing our work every day?
“Values can easily be so generic that they don’t mean anything.” —Grayson Morris, Performio CEO
At Performio, we supplemented our five core values with lists of specific behaviors associated with each one. For example, “play to win” is expanded as follows:
(Feel free to check out our full company values to see the behaviors associated with each.)
That provides a much more coherent and applicable set of standards to follow. Specificity is important because it’s far too easy for people to interpret values differently.
The example Grayson likes to give when onboarding new employees is “respect.” Despite being one of the most common company values claimed by all manner of different organizations, it’s actually a fairly ambiguous word.
For some, respect refers to a status conferred upon those who have put in the hard work and “earned respect.” For others, respect is a baseline standard of decency that should be afforded to everyone. And while some see challenging others over disagreements as a sign of disrespect, others insist constructive criticism is a form of respect.
You have to clearly define what you mean by a given value to prevent misinterpretation. Spell out the specific kinds of behaviors that demonstrate each value, and provide an objective way to determine whether employees are living up to it.
One of the best things you can do to ensure you’re living up to your company values is to actively look for people who align with your values when recruiting new employees.
It isn’t enough to find people who have the right skill set. If there’s a fundamental disconnect between their values and yours, it’s going to be difficult for them to fit in and work well with the team. And it’s better to weed out folks with a different set of values before bringing them onboard.
How do you assess values in an interview? Here’s what Grayson has to say:
“Ideally, the interviewer will ask questions to tease out how a person has responded in previous situations. Then they can assess whether or not that maps to our values. I think it’s critical to get interviewees to tell stories. You can get a lot from just asking people about their past experiences.” —Grayson Morris, Performio CEO
In some cases, you may even want to have a dedicated values interview or questionnaire, but at the very least, your values should be incorporated somewhere into the interview process. Consider creating a scorecard of around five of the value-based behaviors most important to the role, and evaluate whether the candidate’s past actions align with the kind of behaviors you’re looking for.
Specifically look for moments of conflict in the stories a candidate recalls, and pay attention to how they responded. Those will tend to be the most telling moments.
Although sales departments may face unique challenges in living up to company values, they also have a unique tool to help them live up to their values: the incentive compensation plan.
“If you design your incentive compensation plan correctly, you can actually embed your values into your plan.” —Grayson Morris, Performio CEO
Aspirational values are one thing, but the rubber meets the road with paid incentives. If your compensation structure is such that sales reps can earn more money by going against your stated values, you can be certain that some are going to do so.
For example, if you want your sales reps to place more calls, you might consider directly incentivizing that activity—but this may have unintended consequences. Rather than prompting meaningful calls that develop relationships with potential customers, it could tempt sales reps to place as many quick calls as they can in a short period of time. Some sales reps will even hack their phones to automate fake calls for this purpose.
Clearly, such actions would not line up with any organization’s company values. But there’s no reason to place a temptation like that in front of sales reps when you can avoid it with better planning.
Regularly vet your incentive structure to be sure it doesn’t inadvertently disincentivize company values or encourage undesirable behavior. To do this well, you may need to think like an amoral person. Imagine you have no regard for anything but the payout you’ll receive. Then look through your sales comp plan and figure out what you could game for profit. This can help you identify weaknesses in the plan that could be exploited.
Then you can shore up your plan by balancing quantity with quality-based performance measures. Include elements like the length of contracts signed, gross retention, and customer feedback into how your compensation is structured. This helps ensure that sales reps won’t just go for the quick buck, but will seek to establish the kind of long-term relationships you want to maintain with your customers.
It’s also important to find the right number of objectives to include. Too few, and they become easy to game. Too many, and they become spread so thin that they don’t really matter. No one of the objectives should be less than around 20% of someone’s comp. Otherwise, they’ll just ignore it.
Living up to values is hard work, and it’s important to be honest with yourself about that fact. Applying company values in the sales department is going to result in some difficult decisions.
You’ll need to have awkward conversations you’d probably rather not initiate. Depending on how those conversations go, you may need to let someone go—possibly even a high earner. But is it worth enabling a toxic workplace environment to keep them around?
You may encounter times where it really feels like overpromising to the customer would be the best course of action. You might even reason that they’ll appreciate the initial deception on the other side of things, once they’ve had a chance to see your product or service in action. But is it worth gaining an untrustworthy reputation?
“There are many sticky situations where you’ll have to look someone in the eye and decide whether you’re going to truly live your values or try to make it go away.” —Grayson Morris, Performio CEO
These are questions you’re going to have to carefully wrestle with, and there won’t always be a perfect answer. But it’s worth the effort. And it’s better to determine ahead of time how you’re going to respond when these difficult decisions arise.
Company values and incentive compensation are a two-way street. We already considered how you can embed your values into your sales comp plan—but it’s also true that your sales comp plan serves as one of the truest reflections of your company values (whether intentional or not).
We’ve written a free ebook on the subject: How Your Sales Compensation Plan Reflects Your Company Values. In it, you’ll find a detailed explanation of the many ways your sales comp plan interacts with your values, along with a data-based approach to creating a sales comp plan that aligns with the values you want to live up to.
And to see what Performio can do for your organization, request a demo today.