sales team

Is Gauge Variance Messing With Your Sales Team?

Discrete Scale Invariance

Discrete Scale Invariance

Let’s tap into the abstract concept of gauge variance to distinguish a particular type of common sales team dysfunction. First, bare with me as I explain what this gauge variance thing is all about. I will start with the exact opposite property, gauge invariance because the most fundamental aspects of the universe possesses this property–more often called gauge symmetry.  This extremely abstract property is difficult to adequately describe here, but its effects are very important to us. For example, we literally see things because electromagnetism (light) is a necessary consequence of the gauge invariance of the electron field.  Because the dynamics of electrons are constrained by gauge invariance, it necessarily follows (thanks to some mind numbing graduate level mathematics), that photons of light MUST exist to transmit energy (some would say “information”) between electrons. I for one am very happy Mother Nature requires gauge invariance because, among other things, it enables me to see Facebook status updates alerting me to stomach ailments of “friends” I haven’t spoken to in 25 years.

Setting aside Facebook and electromagnetism, think of gauge invariance like this: if I measure the value of a sales deal in dollars and my customer measures the value in euros, we do NOT get different results in terms of value. There is always a publicly available market-driven currency conversion factor which we can use to verify that we both measured the same value for a deal regardless of our choice of currency (our choice of gauge). Now contrast this with measuring something like the coastline of California.

If I measure the beautifully rugged California coastline with a yardstick and my counterpart measures it with a ten-foot pole, will we get the same result?  No!  The concept of “length” in this case fails gauge invariance–it is gauge variant.  It turns out that the length of any randomly uneven surface we measure can grow to infinity as the choice of measuring stick gets shorter.  As our choice of ruler gets smaller, our measurement picks up ever smaller variations in what makes up the “edge of California.”  As we would expect, this is related to resolution.  As you zoom in on the coast, you continually see more detail of the actual coastline.  In essence, measuring a coastline is scale dependent.  Ask me how long the coastline of California is and I will ask you how big is your ruler?

Now, my proposition with respect to sales is that sales teams often measure deals (informally or formally) in ways that are scale dependent. To say the same thing in different words, sales analysis tends to be gauge variant.  It is the differences in choice of gauge which lead to misunderstanding, disagreement and wasted effort.  For example, I found during my 15+ years in sales that sales management and marketing tend to work at the macro scale to set pricing, make national sales predictions, etc.  Sales reps conversely tend to work at the micro scale of individual customer agents, budgets and local competitive conditions.  It doesn’t take a lesson in physics to intuitively understand that this leads to mismatched results and disagreements about what is happening or what is possible.  Nevertheless,  I prefer the rigor of math and science to stimulate my thinking and analysis of age-0ld sales problems.

Gauge variance whether in physics or sales is a constraint that a theory must have to remain consistent (only sensible answers and no contradictions).  In the sales world, this can be intelligently worked around or swept under a carpet (preferably up in the marketing department where no one will look), but how often does that currently happen?  How often did I see, or participate in, ground-up sales estimates that started with local competitive and customer conditions and then rolled up logically to the larger scale of national sales budgets and pricing decisions?   How about never. It might get talked about, but it never actually happened.  Budgets, pricing, quotas, etc. were all top down starting from CEO/CFO expectations for the division, and from division leaders to business unit directors.  Business unit directors would then work feverishly with sales and marketing management to come up with plans that would be acceptable “upstairs”.  Finally, at the annual division sales meeting that kicked off each new year, I’d get a territory expectations report that made me want to shout, “You want WHAT when?”  This is only one example of where the problem of gauge variance starts to rear its ugly head in sales departments.  At each point in the process, from the CEO down to the sales rep, there are dozens of conscious and unconscious choices of gauge that fail gauge invariance and lead to unexpected results, disagreements, confusion and general sales friction.  Tackling this issue might be too grand a vision to start.  What about within sales departments?  Why not acknowledge problems of gauge choice upfront?

Typically a sales manager will inquire how a rep is coming along in terms of hitting sales targets.  If the rep is at or above quota and feels confident, then the response will be “No problem!”  But if there is a problem, the rep typically responds with a stream of detailed customer “issues” that are creating barriers to success.  The manager’s choice of scale is likely “percent of quota” or “percent of budgeted revenue dollars.”  The reps response is based on some completely different measure such as customer specs, customer budgets, etc.  The question is who is right and who is wrong?

It’s hard to tell wrong from right when the choice of gauge is not explicit.  The manager can be right that the sales rep is under-performing budget, while the sales rep is also right that according to his choice of gauge, he is presently achieving super-human progress against insurmountable odds. What would be better is to have ways to measure performance at specified scales and then a way to connect those results across differing scales.  Great sales managers are intuitively good at changes of scale and how to connect between them.  Once a sales manager sees a problem at one scale, she changes her perspective and engages with the rep at the scale where a problem is occurring.  Conversely, a great sales rep who is under performing plan will FIRST acknowledge that according to the choice of sales management gauge, his numbers are “in trouble.”  Then he openly leads his manager into a discussion based on a different scale and asks for guidance and help AT THAT SCALE, which when rolled up to another scale will make a positive difference.

From the beginning of inception I have developed SalesPhase to avoid scale dependent problems that occur in sales measurements.  How?  By taking advantage of something known mathematically as discrete scale invariance, which in this discussion might be better termed, discrete gauge invariance.  By carefully choosing a gauge that works at multiple (but fixed) scales important to corporate management, sales management and sales reps, a significant amount of sales friction can be avoided.  When management and reps share a language of measurement that is discrete gauge invariant, there is far less disagreement and far greater focus on solving the problems at hand.

If  you are interested in discussing the mathematics and science underlying the SalesPhase approach to sales management, tracking and communications, follow me on Twitter or tweet me privately, John Clark @SalesPhase.