PDF Summary:Cracking the Sales Management Code, by Jason Jordan

Sales managers play a crucial role in driving sales success, but many lack a structured framework for managing their teams effectively. In Cracking the Sales Management Code, Jason Jordan addresses this gap by introducing a systematic approach to sales management that focuses on what sales managers can actually control: the activities of their sales team.

Jordan presents the Activities-Objectives-Results (A-O-R) framework, which connects daily sales activities to measurable objectives and business outcomes. He explains how to implement disciplined sales processes, choose appropriate metrics for different sales roles, and manage performance through structured methodologies. The book provides sales managers with practical tools to move beyond improvisation and build a data-driven approach to leading their teams and achieving consistent results.

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How to Maintain the Effect of a New Sales Process

In Drive, Daniel H. Pink explains that the key to high performance and satisfaction is the deeply human need to direct our own lives, to learn and create new things, and to do better by ourselves and our world. By integrating a new sales process into a complete change management framework, you can address these needs by providing salespeople with the autonomy to adapt the process to their unique styles, the opportunity to master new skills through targeted training, and a sense of purpose by aligning the process with shared team goals. This approach helps shift the underlying motivation of your sales team, making the new process feel more natural and satisfying than reverting to old routines.

Jordan emphasizes that for sales processes to be effective, they need backing in the form of training, tools, and metrics. Ready-made sales processes often fail because they're too disconnected from the salesperson's context to fit into their daily activities. It feels cumbersome and awkward when applied practically, causing the system to reject the foreign transplant.

(Shortform note: One reason a new program might be “rejected like a foreign transplant” is that it threatens the existing power structure. If a new program changes who looks successful or influential, those who benefit from the current system may defend their position by discounting, starving, or bypassing the new program until it fades away.)

The Activities-Objectives-Results Approach

In the following subsections, we’ll discuss how to define the A-O-R components, apply A-O-R for sales management and measurement, implement A-O-R, and use it for managerial control.

Defining A-O-R's Components

Jordan introduces the A-O-R system, which is a group of related metrics that link Sales Activities to sales goals and outcomes. The four types of sales goals are Market Coverage, Sales Team Effectiveness, Customer-Centric, and Product-Centric. Sales managers can affect Activity metrics by overseeing sales procedures, Jordan explains. They can't directly control Sales Objectives; instead, they must influence them by directing Sales Activities. Sales Objectives serve as guideposts for daily selling activities of sales teams.

(Shortform note: Jordan’s labels for Sales Activities, Sales Objectives, and the four types of sales goals can be placed within the context of the Balanced Scorecard movement, which began in the 1990s. The Balanced Scorecard was a management tool that expanded the focus of performance measurement beyond financial metrics to include customer, internal process, and learning and growth perspectives. This approach recognized that financial results are lagging indicators and that organizations need to track leading indicators that drive future performance.)

Jordan offers further insight into the four Sales Objective types: 1. Metrics for covering the market evaluate whether there's a sufficient number of sales representatives positioned correctly to reach all targeted leads and clients. 2. Metrics related to the capability of your sales force measure the goal of employing skilled salespeople who can effectively sell your products to your intended clientele. 3. Metrics related to customer orientation evaluate the goal of drawing in, keeping, and expanding the customer base that the organization desires. 4. Metrics on product focus evaluate the aim of selling the products and services that the company wishes to offer. Jordan suggests reverse-engineering metrics layer by layer, enabling you to manage your Activities and observe the Objective and Result numbers move as expected.

The Importance of Learning and Growth

Jordan’s four Sales Objective types are comprehensive, but they may overlook a crucial aspect: the capacity for systematic learning and innovation within the sales organization. In The Balanced Scorecard, Robert S. Kaplan and David P. Norton introduce the “learning and growth perspective,” which identifies the infrastructure that the organization must build to create long-term growth and improvement. This perspective focuses on developing employee capabilities, enhancing information systems, and shaping an organizational culture that continuously supports innovation, learning, and change. By incorporating this perspective, sales organizations can ensure they’re not only meeting current objectives but also building the capacity to adapt and thrive in an ever-changing market environment.

We’ll then explore how sales measurements frequently assess something other than what they appear to measure.

Evaluating With Measures: Actions, Goals, and Outcomes

Jordan points out that sales measurements frequently gauge something other than what they appear to measure. Many sales performance measurements are compound, such as "Sales Call Revenue." These metrics are most effectively considered as simple fractions, consisting of a numerator and a denominator. In this example, "Revenue" is the numerator and "Sales Calls" are the denominator. The metric is designed to evaluate the denominator, not the numerator, which means it’s intended to assess how effective sales calls are.

The Denominator Drives the Focus

In Performance Measurement and Control Systems for Implementing Strategy, Robert Simons explains that performance measures that are expressed as ratios are purposely designed so that the constrained or controllable resource appears in the base and the desired results appear in the top, thereby directing managers’ attention to the efficiency with which that resource is being utilized. Changes in the ratio are therefore interpreted primarily as signals about how well the underlying resource is being managed, rather than about the absolute size of the outcomes achieved.

Applying A-O-R to Sales Measurement and Leadership

A-O-R Implementation: From Results to Activities

Jordan asserts that to reach particular sales goals, you must oversee relevant sales activities. Sales objectives are specific targets for the sales team. They're either set for sales management by higher-ups or identified by the sales team. Managing the activities that lead to them can impact sales objectives. These two metric tiers are closely connected by cause and effect. Overseeing certain sales tasks directly results in the accomplishment of particular sales goals. For example, to increase your customer base, do more prospecting. To boost customer spend, improve your account strategies. To accelerate the time it takes for new sales representatives to become fully productive, increase training. Requesting certain sales targets without confirming the appropriate activities are implemented can lead to performance that is erratic and difficult to manage.

The Pitfalls of Managing Sales Activities

While overseeing specific sales activities can help you achieve your sales objectives, it can also lead to unintended consequences. In The Tyranny of Metrics, Jerry Z. Muller explains that when rewards are tied to performance metrics, people will focus on improving whatever is being measured, often by gaming or manipulating the indicators, even if that behavior undermines the broader purposes the metrics were meant to advance. For example, if you increase prospecting to grow your customer base, salespeople might focus on quantity over quality, contacting more leads but with less personalized attention, which could reduce conversion rates. If you improve account strategies to boost customer spend, salespeople might push for upsells that don't align with customer needs, leading to dissatisfaction and churn. If you increase training to accelerate new sales representatives' productivity, they might rush through training modules without fully absorbing the material, resulting in poor performance.

Managerial Control Through A-O-R

Jordan suggests that managers can use A-O-R measurements to effectively oversee various sales processes. For example, if a sales rep is pursuing a strategy to acquire new customers, a process for managing territories can help them target high-potential prospects. If a sales rep is executing a strategy to deepen account engagement, an Account Management strategy can help them grow the percentage of customer spending for each account. Managers can define particular activity-based metrics for each team of representatives.

The Balanced Scorecard Approach to Management

The idea of using A-O-R measurements to oversee territory management, Account Management strategy, and other sales processes is rooted in the Balanced Scorecard approach to management. In The Balanced Scorecard, Robert S. Kaplan and David P. Norton argue that managers should use a variety of metrics to measure performance. However, he explains that these metrics should be organized into different categories, such as financial, customer, internal process, and learning-and-growth perspectives. This ensures that operational metrics are aligned with the company’s overall strategy.