About Canidium LLC:

Canidium LLC is the leading provider of sales performance and incentive compensation management services that optimize the ratio between compensation and sales. Canidium’s unbiased, value added approach utilizes best practices and the best of breed vendors to implement and integrate sales incentive and compensation systems, as well as supporting business intelligence and analytics in order to achieve optimal results in line with a company’s overall business strategies.

Based in Houston, Texas, Canidium provides hands-on support during the entire project lifecycle to ensure its Fortune 500 clients receive the critical information necessary to execute and obtain outlined sales objectives.

For more information, please visit www.canidium.com. Find Canidium on: Facebook /Twitter /Linkedin.

About NICE Systems

NICE Systems (NASDAQ: NICE), is the worldwide leader of intent-based solutions that capture and analyze interactions and transactions, realize intent, and extract and leverage insights to deliver impact in real time. Driven by cross-channel and multi-sensor analytics, NICE solutions enable organizations to improve business performance, increase operational efficiency, prevent financial crime, ensure compliance, and enhance safety and security. NICE serves over 25,000 organizations in the enterprise and security sectors, representing a variety of sizes and industries in more than 150 countries, and including over 80 of the Fortune 100 companies. www.nice.com.

Come join Callidus, numerous Callidus customers, expert analysts, and Canidium representatives at the Callidus C3 Sales Revolution conference.

About Canidium LLC:

Canidium LLC is the leading provider of sales performance and incentive compensation management services that optimize the ratio between compensation and sales. Canidium’s unbiased, value added approach utilizes best practices and the best of breed vendors to implement and integrate sales incentive and compensation systems, as well as supporting business intelligence and analytics in order to achieve optimal results in line with a company’s overall business strategies.

Based in Houston, Texas, Canidium provides hands-on support during the entire project lifecycle to ensure its Fortune 500 clients receive the critical information necessary to execute and obtain outlined sales objectives.

For more information, please visit www.canidium.com. Find Canidium on: Facebook /Twitter /Linkedin.

About Callidus Software

Callidus Software Inc. (NASDAQ:CALD) is the market and technology leader in sales effectiveness and cloud computing. Our customers gain a competitive advantage by maximizing sales cost efficiencies and driving improvements in sales effectiveness. CallidusCloud’s award-winning multi-tenant SaaS applications set the standard for performance management of a company’s sales force and channel partners. Over 2.5 million users rely on our solutions to power their performance. For more information, please visitwww.calliduscloud.com.

Behavior is easily shaped through the use of markets and incentives.  The question throughout history has never been about if it is possible to motivate people.  It has always been about the how and  why.  Because, while behavior is easily affected, it is not so easy to direct that behavior in precisely the manner you wish.  Nearly daily, there are accounts of incentives gone wrong and plans gone surprisingly right.  Whether there were unintended results, out of whack expectations, or misdiagnosed priorities… trouble (and success) is lurking.

In an effort to create an ongoing chronicle of markets and incentives and there real-life place in this world, we’re going to pick a good, a bad, and a downright ugly episode to discuss. Hopefully we can make this a regular entry as there is no shortage of
material.

The Good

There are plenty of occasions where incentives are setup for a purpose and meet expectations with flying colors.  However, the true “success” of an incentive program is often a matter of perspective.  Think of incentives as a tool or a weapon in much the same way we think of the atom bomb.  The bomb was a huge success in some history books… while a colossal disaster in others.  The ultimate outcome is almost never predictable when so much power is wielded.

*Obviously an incentive program will not do the damage or have the global effect of an atom bomb, I’m just being dramatic.

In this Business Week article (the second one), Higher Wages Lead to Less Corruption, the link between wages and corruption is highlighted.  Apparently the Prime Minister of Singapore makes about $2.4 million per year compared to about $400k for our American President.  The higher wages are appalling to many but they serve as a valuable deterrent to corruption.  It has been well documented that a gross imbalance between the power of a position and its pay lead ultimately to having that imbalance lessened through elicit and/or creative means.  Incidentally, Singapore ranks very highly on the least corrupted list.

The Bad

The Occupy Wall Street movement has really sunk their teeth into the “top 1%” of earners in America.  The Income Gap: Unfair, Or Are We Just Jealous? It’s a populist ploy that goes back to the beginning of human civilization.  Within our cocoons of daily business I doubt that many of us really consider the societal effects or our compensation plans.  However, it’s probably a good idea to monitor the caste systems being built within your organization.  If you have a sales rep making 100x more than a coworker, then be prepared to justify that in some way.  It’s a good strategy to tout the value of your top performers at all times without flaunting their rewards.  A bit of discretion and a dose of humility can go a long way.

The Ugly

I take this from Dilbert (if I remember correctly); a perfect, albeit extreme, example of an incentive program with some unexpected results.  Boss: The Company is proud to announce that we have successfully achieved our goal of having only 10 workplace accidents for the entire year… Unfortunately, we had to injure two people on December 31^st in order to hit that goal.

The Fast Tech 50 Awards are given to the top 50 companies in terms of greatest percentage revenue growth. Like Canidium, many of the companies competing for these awards are consulting groups. This is the first year Canidium has been eligible to participate in the Fast Tech 50, as the company was founded in 2008.

“Canidium has achieved tremendous growth in revenue over the past three years” said Doug Erb, Canidium CEO. “We are honored to be presented with this esteemed award and look forward to being recognized for years to come.”

Canidium LLC posted $1.72 million in 2009 and $3.35 million in 2010. Doug Erb attributes the company’s success and rapid growth to the expanding consulting team and the growing recognition of the company’s expertise in the field of sales performance and incentive compensation. Canidium uses an unbiased, value added approach to implement and integrate sales incentive and compensation systems, as well as to support business intelligence and analytics in order to achieve optimal results in line with a company’s overall business strategies.

The 2011 Fast Tech 50 Award rankings were announced on Tuesday, November 29, 2011 at a luncheon hosted by the Houston Business Journal, Houston Technology Center, Pierpont Communications, PKF Texas, Rice Alliance for Technology and Entrepreneurship, and Wealth Design Group.                       

About Canidium LLC:

Canidium LLC is the leading provider of sales performance and incentive compensation management services that optimize the ratio between compensation and sales. Canidium’s unbiased, value added approach utilizes best practices and the best of breed vendors to implement and integrate sales incentive and compensation systems, as well as supporting business intelligence and analytics in order to achieve optimal results in line with a company’s overall business strategies.

Based in Houston, Texas, Canidium provides hands-on support during the entire project lifecycle to ensure its Fortune 500 clients receive the critical information necessary to execute and obtain outlined sales objectives.

For more information, please visit www.canidium.com. Find Canidium on: Facebook /Twitter /Linkedin.

The webcast, “Behavior Based Coaching: How to put the Performance Management back in Sales Performance Management”, will teach viewers the basics of sales coaching. Sales coaching is a relatively new concept; but can offer important benefits to any organization. It can increase consistency and efficiency, put a process in place that can be easily repeated, and allows visible tracking of change. It also provides a comprehensive approach to sales performance management.  

Doug Erb, Canidium’s president and co-founder, will lead the presentation along with Dave Tharp, Canidium’s director of sales effectiveness. The presenters bring more than 25 years combined experience in the field of sales performance management in several industries, including Banking, Insurance, Manufacturing, Retail, and Telecommunications.

For anyone who manages a sales team or is currently looking at a SPM system, this session will help identify ways to leverage today’s market-leading SPM technology to manage a sales force more effectively and efficiently. The key lessons will be the best way to determine metrics that fit the company’s needs, best practice to aggregate data and identify gaps, and the most effective way to manage data through the sales coaching lifecycle.

To register for the free webcast please visit www.hr.com, and for more information on Canidium please visit www.canidium.com.

About Canidium LLC: 

Canidium LLC is the leading provider of sales performance and incentive compensation management services that optimize the ratio between compensation and sales. Canidium’s unbiased, value added approach utilizes best practices and the best of breed vendors to implement and integrate sales incentive and compensation systems, as well as supporting business intelligence and analytics in order to achieve optimal results in line with a company’s overall business strategies.

Based in Houston, Texas, Canidium provides hands-on support during the entire project lifecycle to ensure its Fortune 500 clients receive the critical information necessary to execute and obtain outlined sales objectives.

For more information, please visit http://www.canidium.com/. Find Canidium on: Facebook /Twitter /LinkedIn.

Still, I’m a little curious as to why this industry has held on so tightly to this pay mix.  Is it just a matter of tradition?  Or is it a belief that service levels would suffer if their dependence on tips were to lessen?  I have a feeling that most restaurant managers believe strongly in a consumer based incentive.  Treat the customer right and you get paid more.  Do your job quickly and accurately; and get immediate feedback from your customer in the form of a higher tip.  It’s pay for performance in its purest form: an economist’s dream.

So if it’s so effective, why don’t all personal service providers use this type of compensation plan? Think of the possibilities.

Personal Trainers – PTs (as they refer to themselves in the industry) generally get paid per hour of service.  The rates vary usually based on the clientele.  I’m sure some would argue that they do receive a de facto incentive pay because most PTs build their own client base and maintain that themselves.  It stands to reason that if they aren’t very good they’ll lose clients.  But what if you could take it a step further and pay them based on results instead of usage?  It could be something measurable such as weight loss or waist size reduction.  If you aren’t really looking to lose weight, maybe it’s a measure of your cholesterol levels or oxygen absorption ratio (If that exists).  Or maybe you just want to pay an incentive to your PT for getting you to the gym in the first place.  A great PT would take a personal interest in your health and monitor more than just your squatting technique.  If you skip a day they should be calling or coming by to snatch your Oreos and pull you off the couch.  The possibilities are endless.

Doctors – Physicians of all disciplines are constantly balancing the social and technical aspects of job; and many struggle mightily.  The perfect doctor would be someone who was first in their class in medical school and also reads Jodi Picoult.  The technical ability is what we respect most about doctors and most of us believe that’s what we’re paying for when we visit.  However, it’s the personal touch (or lack thereof) that determines whether or not we’re happy with the outcome.  Doctors who have mastered both aspects should get paid more., while doctors who fall short in either aspect should be encouraged to improve.  On the technical front, the incentive to perform is there in the form of possible litigation.  If that doesn’t motivate a physician to study the latest techniques then nothing will.  On the soft (or patient care) side, incentives could be a solution.  I would love to simply have a tip line on my exit bill (similar to my restaurant check).  That would give me the avenue for providing immediate and meaningful feedback to the doctor who just serviced my needs.  I think we often forget that doctors and nurses are service providers; many of them lose sight of that as well.

Mechanics – Auto service technicians, the doctors to our vehicles.  Is there an industry with a broader range of performance amongst providers?  I’ve seen good and bad technicians.  I’ve seen honest and dishonest.  They run the gamut.  Everybody I know says the same thing: if you find a good mechanic, one who knows their stuff and won’t scam you… hold onto them forever.  That’s really a sad statement when you think about it, sad but true.  So how great would it be to have incentives built into every job?  What if you could hold back fees if the car took an extra day or ten to have the carburetor rebuilt?  Too often right now we feel powerless.  It would be nice to have some assurance that the mechanic has a real incentive to follow through on their promises.     

Airlines – Taxi drivers get tips.  Why don’t pilots?  I know there’s a full team involved in delivering a plane full of passengers from one place to another. I know there are weather and mechanical problems and terrorist threats.  But still, aren’t airlines supposed to be a service industry?  They’re not delivery companies, they transport humans and they should try to make that experience as pleasurable as possible.  I’d be in favor of allocating a portion of my fare to a tip pool that gets held back until I’ve arrived satisfied.

So what is “Analytics”?

Analytics (according to Webster’s)

[An-l-it-iks] noun. The science of logical analysis.

Clear?  So it turns out that the term analytics is more of a discipline than a destination.  More specific to sales compensation:

Sales Compensation Analytics (my definition)

The science of dissecting sales compensation data in an effort to forecast, model and detect patterns with the ultimate goal of discovering methods for optimizing the ratio between sales and compensation.

Analysis is done everywhere.  I suppose there is a critical point at which analysis becomes “analytics”.  It’s the scale, granularity and robustness that vary from organization to organization.

At one end of the spectrum you might have The Stone Company; they operate in the proverbial dark ages of compensation management.  They manually calculate commissions and pass them around on spreadsheets.  HR does pay analysis by requesting a dump of data from the payroll system.  The only reports upper management have is very high level.  They basically have payroll history in a sort able spreadsheet.  They can tell you how many sales reps made more money than the CEO, but they can’t tell you why.  They’re forced to manage by gut and not surprisingly, they do alright because they’ve been doing it this way for years and there’s not a lot of risk taking.  Many businesses operate this way. 

At the other end you have The Glass Company; they’re a world class outfit when it comes to compensation management.  They get fresh reports daily from an automated, online system.  Sales and compensation can be sliced and diced at the most granular level.  They can give you the global average cost of sales for widget X on Tuesdays.  They can tell you how many times a customer bought accessory B with widget Y.  They can tell you how many sales reps are on pace to hit quota and they can model the effects of the proposed new marketing campaign.  They still use their gut but they back decisions with data.  The business feels empowered to try new things and innovate. 

Notice that the difference between the two companies is not the talent of management or the insight into the value of strategic compensation.  The difference is in the tools available.  Many, many companies make do with very limited access to data and analysis tools.  They make do by working with what they have and by filling the gaps with assumptions and experience.  However, they would use more data if they had it.  The thirst for data and insight is unlimited.  That’s a universal truth.

Why Doesn’t Everyone Have Tools?

A developing theory I’ve had over the years is that most companies stuck in the dark ages are there because they can’t decide where to go.  Imagine that we were running an experiment where we put a group of people down into a deep tunnel with several unmarked passages to lead them out.  Nobody in the group knows which way is out and they must decide what to do.  I think we’d find several outcomes.  Some groups would follow a strong leader who would decide, rightly or wrongly, the direction.  Other groups would split up and go in several directions each with their own goal in mind.  Some groups wouldn’t be able to decide on a common direction and the debate would paralyze them, they’d just sit there. 

These outcomes are analogous to what we see in the SPM world in regards to analytics.  Some companies are stuck in paralysis.  They agree that something must be done but they can’t agree on how to do it, so nothing is done.  Some companies have followed a direction set by a strong leader.  Other companies have developed independent capabilities in several places within the organization.

Macro-Analytics vs. Micro-Analytics

The reality is it is very unlikely that you will be able to build a monolithic analytics environment that gives everyone what they need in one rollout.  There are too many perspectives to satisfy. 

The most common divide is a concept I like to call macro vs. micro.  When putting together an analytics tool the most important element is the data and how it’s structured.  Often times you need to tweak your source systems in order to produce data at the level desired for your analyzers.  Here’s where the conflict occurs. 

Let’s take a Global Compensation Director.  She would like to look at her data at a summary level based on role, country, etc.  She wants to reconcile compensation data from the SPM system with data from the accounting system and the sales reporting system.  Global Directors want to view metrics like a captain of a cruise ship.  Cruise ships can drift a few feet off course as long as the captain can avoid the ice burgs.

Now let’s take the Compensation Analyst assigned to the Northeast New Jersey territory in the retail business unit.  He wants account level and product level metrics.  Analysts need to know the specific rate paid on specific orders.  They are looking to find deviations at a micro-level.  They need to answer questions related to the setting of quotas and the effect of vacation time.  Analysts deal with individuals and their paychecks, there is no place for estimations, averages and summaries when it comes to paychecks.

Take the First Step

So where is the “analytics” City of Gold?  Every company needs to draw their own map.  Certainly there are many ideas out there that can be reused as starting points or templates.  This isn’t a case where you buy a tool and it triggers a wave of game changing analytical analysis that you’ve never heard of.  What a nice analytics tool gives you is built-in adaptability.  You might start with one vision and change it later after a period of use. However, in order to get started, every stakeholder needs to identify what they want to see.  Priorities can be set based on the value each capability provides.  Perhaps its Finance’s ability to do better forecasting that takes the top spot.  Perhaps is Sales’ ability to analyze the impact of spiffs.  Perhaps you choose to provide the capability that is cheapest to implement.  Whatever the case, any capabilities are better than none.

My favorite analogy to use here is the construction of the New York subway system.  The intricate web of tracks we see today all started with a single line.  At the time nobody envisioned what is it today and I would bet there was great debate over where to start.  Thankfully, they started somewhere and New Yorkers have been benefitting ever since.

The latest is an upcoming movie titled “In Time” starring Justin Timberlake.  This one is set in a world where everyone on the planet stops aging once they turn twenty-five.  On that birthday, they’re given one year of time to deposit in their proverbial bank account.  That time continuously counts backward and if it reaches zero you die.  In other words, every minute of your life is being spent as you continue to live.  In order to survive, you have to earn more time to keep your account balance positive.  In essence, time becomes the new currency of the day.  Everything from coffee to magazine subscriptions is purchased by withdrawing time out of your account.  Every job pays wages in minutes that you deposit into your account and use to live another day.  Time is literally money and money is literally time.

Based on the trailer, the movie looks like a bit of a dramatic thriller.  All kinds of social and societal dynamics are explored and apparently danger lurks on every corner.  It looks like a super-intense version of real life; which I suppose is what happens when going broke literally kills you and getting rich means you undoubtedly have to take other people’s lives away from them.  The possibilities are endless, I hope it delivers.

Obviously, in real life we value time in a figurative sense.  Most of us can’t really place a dollar value on a minute, but we cherish it nonetheless.  When we “get more time”, it probably means we just have more time not reserved for someone or something else (i.e. free time).  People often talk about wanting more free time but I’ve never seen anyone place a true monetary value on it.  I wonder what the true value of free time would be to the average American?  It would be an interesting experiment to modify an incentive compensation plan to use time as currency instead of money.  What if the bonus for hitting quota was not just a monetary reward but also a time reward?  What if an extra day off came with a smaller bonus?  If a sales rep had the choice of a bonus plan paying in money or time or a blend which would they choose? 

My hunch is that all individuals are not the same.  American’s have a reputation for valuing money over time and I’m sure many would live up to that expectation.  However, I suspect there would be individuals more than satisfied with some extra time off instead of heftier bonus checks.  Of course, the experiment would have a major bias if you only looked at sales people.  Overachieving sales reps tend to be the workaholic, money motivated types.  But you never know; personal situations and the business of life could become an even bigger influence than it already is and motivate people to take more time for themselves.  As the old saying goes:

“No one on his deathbed ever said, ‘I wish I had spent more time on my business’.”

Canidium’s team will implement Real Goods Solar’s new incentive compensation management system, which will allow the company to oversee sales incentive design, modeling, quota allocation, dispute resolution and analytics. Incentive compensation management services will provide the company with more control over sales execution.

Real Goods Solar has led the sustainable living market through education, solar installation and renewable lifestyle products for 33 years. The company is the leading solar energy integrator, having installed over 11,500 solar electric systems for homes, schools and businesses across the country. With 15 offices in California, Colorado and the Northeast Real Goods Solar is one of the largest residential solar installers in the United States. As a result, Real Goods Solar enlisted the help of Canidium to implement a new incentive compensation management system for their sales force. 

Kent Halliburton, vice president of sales and software at Real Goods Solar, said: “In an extremely dynamic and fast paced industry, Canidium’s implementation will provide the compensation flexibility Real Goods Solar’s world-class sales organization needs to stay ahead of the market.”

Added Erb: “At Canidium we strive to provide the highest quality incentive compensation management services to each of our customers. Working with the professionals at Real Goods Solar has been a positive experience and we look forward to growing our relationship with them in the future.”

Canidium uses an unbiased, value added approach to implement and integrate sales incentive and compensation systems, as well as to support business intelligence and analytics in order to achieve optimal results in line with a company’s overall business strategies. For more information on Canidium please visit www.canidium.com.   

About Canidium LLC: 

Canidium LLC is the leading provider of sales performance and incentive compensation management services that optimize the ratio between compensation and sales. Canidium’s unbiased, value added approach utilizes best practices and the best of breed vendors to implement and integrate sales incentive and compensation systems, as well as supporting business intelligence and analytics in order to achieve optimal results in line with a company’s overall business strategies.

Based in Houston, Texas, Canidium provides hands-on support during the entire project lifecycle to ensure its Fortune 500 clients receive the critical information necessary to execute and obtain outlined sales objectives.

For more information, please visit www.canidium.com. Find Canidium on: Facebook /Twitter /Linkedin. 

About Real Goods Solar:

Real Goods Solar is a leading solar energy integrator, having installed over 11,500 solar electric systems for homes, schools and businesses across the country. Real Goods Solar offers turnkey solar energy solutions, and has 33 years of experience in solar energy, beginning with its sale of the first solar photovoltaic panels in the United States in 1978. With 15 offices in California, Colorado and the Northeast Real Goods Solar is one of the largest residential solar installers in the United States. For more information, go to www.RealGoods.com or call 1-888-56-SOLAR (1-888-567-6527).

The webcast, “All Systems Are Not Created Equal: Learn to Perform Vendor Comparisons and Maximize Your ROI”, will walk participants through a sample plan for accomplishing goals, will review a traditional timeline, and will provide information on how to choose the best system to maximize ROI. Participants will learn to look beyond the bells and whistles of vendor demos to determine which software is the best fit for their organization’s specific needs.

Doug Erb, Canidium’s president and co-founder, will lead the presentation. Erb has more than 13 years of experience architecting and implementing sales performance management solutions. He co-founded Canidium in 2008 and has achieved a wide variety of experience in several industries including Banking, Insurance, Manufacturing, Retail, and Telecommunications.

If you are looking at a SPM system or are currently doing an evaluation, this session will help you learn which ROI drivers to consider, will help you determine how to apply them to your situation, and will teach you how to navigate the vendor nod and flashy demos.

To register for the free webcast please visit www.hr.com, and for more information on Canidium please visit www.canidium.com.

About Canidium LLC: 

Canidium LLC is the leading provider of sales performance and incentive compensation management services that optimize the ratio between compensation and sales. Canidium’s unbiased, value added approach utilizes best practices and the best of breed vendors to implement and integrate sales incentive and compensation systems, as well as supporting business intelligence and analytics in order to achieve optimal results in line with a company’s overall business strategies.

Based in Houston, Texas, Canidium provides hands-on support during the entire project lifecycle to ensure its Fortune 500 clients receive the critical information necessary to execute and obtain outlined sales objectives.

For more information, please visit http://www.canidium.com/. Find Canidium on: Facebook /Twitter /LinkedIn.