Industrials Case Study

Simplifying Global Comp Program to Spur Growth

Background

A Globally Complex Plan Design

Optimizing plan design is a complicated endeavor. However, when plan proliferation occurs on a global level, the complexity level can increase exponentially. 

Our client is a global leader in industrial products, organized by multiple lines of business, and employs worldwide sales teams with over 5,000+ sellers. This company required assistance analyzing over 2,500 sales job titles with more than 200 different compensation plans across regional and global selling teams.

This leader chose Alexander Group because of our industry experience, sales compensation expertise, proven strategic frameworks and solutions-oriented approach toward complex situations. 

Approach & Expected Outcomes

Create a Path for Success

Given the scope and complexity of the issue, Alexander Group created two projects and four phases that included:

Project 1

Phase 1: Strategy confirmation diagnostic

Phase 2: Global framework design

Project 2

Phase 3: In-region plan designs

Phase 4: Implementation and change management

These projects and phases aimed to create a pathway for successful analysis, design and implementation of a holistic global sales compensation program. 

Current state assessment

Gain a comprehensive evaluation of the current global plan and administration by comparing existing practices to industry best-in-class principles, market practice and alignment with the client’s growth strategy. 

Quick wins

Identify quick wins for immediate execution. 

Global framework

Create a global plan framework design by platform job with committee consensus on global program guiding principles, regional/global component designs and in-region design guidelines. 

Administration and governance enablement

Identify changes to make the administrative process more efficient and cost-effective, driving an engaging employee experience. 

Regional design

Craft in-region plan designs that are globally consistent and drive specific behaviors aligned with regional business needs. 

Efficient plan rollout

Develop a successful, on-time, coordinated plan rollout with rep-specific reference materials. 

Repeatable processes

Design repeatable processes to allow for plan updates that evolve with strategy and structure changes. 

Key Insights

Create a Path for Success

The projects and phases revealed multiple insights from the current state that set the foundation for solutions and alignment with their business objectives. 

Plan Proliferation

With over 200 unique plans, significant plan variation, legacy practices and differing leadership philosophies, the company endured regional misalignments in its global commercial strategy. Plan proliferation limited their ability to adjust and evolve the company’s global commercial strategy.

Job Role Dis-Clarity

5,000+ individuals participated in the sales compensation program across 2,500 unique job titles and 250 unique job profiles. The resulting coverage and job role execution varied significantly across global sales teams.

Plan Complexity and Misalignment

Many plans had more than three measures, multiple modifiers and complex mechanics. In addition, pay practices did not follow best practices. The resulting impact was that the incentive structure inhibited the company’s ability to influence seller behavior and drive growth while reducing overall plan effectiveness.

Quota Plan Inefficiencies

Multiple factors caused sales leaders to lack confidence in quota allocation accuracy. Additionally, many quota attainment distributions did not align with best practices. Overall, their quota-based plans had limited effectiveness. Rep turnover, overpayment and underpayment also reduced aggregate quota achievement.

Other Factors

Issues with split crediting, decentralized and manual plan administration processes, and launch delays added to the company’s inability to effectively launch, administer and deploy plans across all business units.

Results & Recommendations

Simplify to Grow Revenue

The project results were impressive and assisted the client in achieving their stated goals.

Fewer Platform Jobs

Reduced the number of platform jobs from 250+ to 37, addressing multiple business units

Fewer SIP Plans

Reduced the number of global SIP plans from 200+ to 37

Quota-Based Bonus

Migrated approximately 1,000+ sellers from commission plans to quota-based bonus plans

Improved Plan Design

Designed optimal sales compensation plans by role to drive global commercial strategy, improve plan effectiveness, reduce administrative burden and ensure regional flexibility

Plug Sales Comp Leaks

Eliminated global sales comp leaks and pay for performance alignments for annual cost savings of $40M at target (10% of total SIP budget)

Quota Standardization

Created standardized global quota allocation program

Alexander Group’s proven management framework and sales compensation expertise supported this global leader in efficiently aligning its sales resources and investments with its strategic growth strategy. They now have an effective plan design that drives positive sales behaviors, simplifies their plan design and creates a foundation for growth.

Alexander Group has helped thousands of clients.

Our expert leaders assess, align, design and implement powerful sale compensation programs. Alexander Group has helped organizations realize the full benefits of effective sales compensation programs to attract, retain and reward best-in-class sales talent to profitably grow the business. 

We can help with all elements of your sales compensation program.

About Alexander Group

Alexander Group understands your revenue growth challenges. Since 1985, we’ve served more than 3,000 companies across the globe. This experience gives us not only a highly sophisticated set of best practices to grow revenue—we also have a rich repository of unique industry data that informs all our recommendations. Aligning product, marketing, operations and finance efforts behind a successful sales organization takes insight and hard work. We help the world’s leading organizations build the right revenue vision, transform their organizations and deliver results.

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